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U.S. -China Economic & Security Review Commission 



The 88 Queensway Group 

A Case Study in Chinese Investors' Operations in Angola and 

Beyond 



July 10, 2009 



Lee Levkowitz, Policy Analyst 
Marta McLellan Ross, Policy Analyst 
J.R. Warner, Research Assistant 



Disclaimer: This paper is the product of professional research performed by staff of the 
U.S. -China Economic and Security Review Commission and reflects the work of the 
authors. This paper and its contents do not necessarily reflect the positions or opinions of 
the Commission or its members or of any of the Commission's other professional staff. 



EXECUTIVE SUMMARY 



The 88 Queensway Group 

An initial search for Chinese firms operating in Angola resulted in a list of several companies with 
their headquarters located at the same Hong Kong address. Further investigation revealed that a 
handful of Chinese individuals control over thirty companies located at this address - 10/F Two 
Pacific Place, 88 Queensway, Hong Kong. Thus, for simplicity, this paper refers to this group of 
investors as the "88 Queensway Group." The research presented in this paper is not a 
comprehensive overview of China's involvement in Africa or Angola; rather, it is an in-depth study 
of this group of investors. 

The 88 Queensway Group's origins are imprecise and its power structure and relationship to the 
Chinese state remain unclear. Its subsidiaries and their operations have not been linked publicly in 
media reports. Although the Group's companies often are classified as "private" and based in Hong 
Kong, there is evidence that several of its key personnel have ties to Chinese state-owned enterprises 
and government agencies, including China International Trust and Investment Company (CITIC), 
and China National Petrochemical Corporation (Sinopec), and possibly China's intelligence 
apparatus. The Group also has gained high-level access to the governments and national oil 
companies of the countries in which it invests. In the past five years, the 88 Queensway Group has 
established over thirty different holding companies and subsidiaries for the purpose of investing 
globally. In addition to Angola, the 88 Queensway Group has operations throughout sub-Saharan 
Africa, Latin America, Southeast Asia and the United States. 

The 88 Queensway Group: One of Two Main Vehicles for Chinese Financing and 
Investment in Angola 

The primary vehicle for official state-controlled lines of credit for the financing of construction and 
resource extraction projects in Angola is the Export-Import Bank of China (China Ex-Im Bank). 
China Ex-Im Bank has extended several oil-backed loans worth at least $4.5 billion to Angola for 
reconstruction projects, which according to contract terms must be completed predominantly by 
Chinese construction companies. The funds for these projects are administered in a relatively 
transparent manner by the Angolan Ministry of Finance. 

In addition to China's official lines of credit, the 88 Queensway Group has provided a significant 
amount of financing and investment in Angola. These investments have been divided between two 
companies: 

• China International Fund Limited (CIFL) 

• China Sonangol International Holdings Limited (China Sonangol) 

CIFL is responsible for financing and managing the 88 Queensway Group's construction projects, 
and has provided at least $2.9 billion to Angola for infrastructure reconstruction. These funds are 
administered by the Angolan government's reconstruction office, Gabinete de Reonstrucao Nacional, 
which is directly linked to the Presidency and has little transparency or accountability. China 
Sonangol is a joint venture between one of the 88 Queensway Group's companies and Sonangol, 
Angola's national oil company. China Sonangol is responsible for the management and operation of 
the Group's energy sector projects, and has established a joint venture with Sinopec, one of China's 
state-owned oil companies, for oil exploration in Angola. 

The Global Scope of the 88 Queensway Group's Operations 



i 



Although the majority of the 88 Queensway Group's activities are concentrated in Angola, it also was 
active in Argentina, Congo-Bra22aville, and Venezuela by 2005. The Group steadily has expanded its 
global operations since 2007 and is now active in Africa, Latin America, Southeast Asia, and the 
United States. Some of its recent operations include: 

• the construction of an airport terminal in Tanzania and acquisition of 49 percent of Air 
Tanzania in 2008; 

• the purchase of the JP Morgan Chase Building in Manhattan, 49 percent of the former New 
York Times Building, and 49 percent of the Clock Tower in Manhattan for $710 million in 
August 2008; 

• the procurement of a $200 million stake in an oil and gas field in Indonesia in 2009; and 

• the acquisition of 9.1 percent of a major construction and civil engineering firm in Singapore. 

Evidence also suggests that the Group could be active in Cote d'lvoire, Mozambique, Nigeria, North 
Korea, and Russia. 

Key Findings: 

■ Although the 88 Queensway Group is portrayed to the public (and accepted publicly) as a private 
Hong Kong-based company with no government affiliation, some evidence suggests that several 
of the Group's personnel are connected to the Ministry of Public Security or the Ministry of 
State Security. 

■ The Chinese Ministry of Foreign Affairs' (MFA) support for the 88 Queensway Group has been 
inconsistent, and recently the MFA has taken steps in its public statements to distance itself from 
the activities and companies associated with the 88 Queensway Group. 

■ In the majority of the countries in which the Group is active, it has established and cultivated 
relationships with foreign entrepreneurs, businesspeople, or consultants who are already well- 
established in the target sector or market. 

■ The paucity of public information about the professional and personal backgrounds of the 88 
Queensway Group's key personnel prior to 2003 prevents a solid conclusion about whether or 
not the Group is an operation controlled by the Chinese government. 

■ The case of the 88 Queensway Group demonstrates that there is a diverse set of actors involved 
in China's "going out" strategy. For example, in Angola, Chinese government agencies, state- 
owned enterprises, and private investors are active in Angola's energy and infrastructure sectors. 
Angola has received delegations from various Chinese government agencies; loans from three 
Chinese policy banks; and investments from numerous Chinese state-owned companies. On top 
of this, the 88 Queensway Group has created a financing structure for projects in Angola's 
construction sector which is comparable to, but separate from, the China Ex-Im Bank credit 
lines. 

■ Often, analysts view China as a monolithic actor, with one strategy applying to all facets of its 
international relationships. However, the case of the 88 Queensway Group demonstrates that 
Chinese investments and relationships are far more complex, involving different layers of 
ministries, state-owned enterprises, and individual actors. 

■ The lack of transparency and public accountability surrounding the 88 Queensway Group is a 
major concern for the United States. By posing as a private firm, the Group creates numerous 
companies within a complicated organizational structure to invest globally, thereby enabling the 



ii 



Group to acquire assets unnoticed. The 88 Queensway Group's purchase of high-profile real 
estate assets in the United States underscores the importance of identifying the extent of the 
Group's connections to the Chinese intelligence community, the public security apparatus, and 
state-owned enterprises. 

If U.S. efforts to promote development and democratization in Africa and Latin America are to 
advance, it is essential that the United States understands the complete narrative of Chinese 
investments in Africa and who is controlling these investments. 



iii 



I. INTRODUCTION 



In May 2008, the Research Working Group of the U.S. -China Economic and Security Review Commission 
requested research on the political, economic, and security relationship between the People's Republic of 
China (PRC) and sub-Saharan Africa. Interest in this topic was sparked by the relatively wide media coverage 
and commentary on China's activities in Africa and speculation about China's "going out" strategy - a 
strategy articulated in 2002 by then-President Jiang Zemin that encouraged Chinese firms to "go out" of 
China and establish international operations. While a large amount of research has been conducted on 
Chinese investments in Africa, our research found a prevailing question that remained unanswered: Are 
investments in Africa by Chinese companies state directed and made for strategic purposes, or are they 
commercially oriented and profit driven? Consequently, what is the impact on the United States? 

In order to answer this question, Commission staff focused this study on China's relations with Angola in 
part because of its recent emergence from three decades of civil war, putting it at a crucial point of 
development in its intricate bilateral relationship with China. 

During this examination of Sino-Angolan relations, analysts discovered a consortium of Chinese investors 
nominally located in Hong Kong. The research presented in this paper is not a comprehensive overview of 
China's involvement in Africa or Angola; rather, it is an in-depth study of this group of investors. The group 
is a preponderant actor in Angola and wields tremendous influence over China's economic and business 
relations with Angola. In addition, our research has found that the group has major investments in other 
African, Latin American, and Southeast Asian countries as well as in the United States. This paper's detailed 
examination of the consortium attempts to place this group's activities within the context of China's overall 
"going out" strategy and to offer recommendations for areas of future research. 

Introduction to the 88 Queensway Group 

An initial search for Chinese firms operating in Angola resulted in a list of several companies with their 
headquarters located at the same Hong Kong address. Further investigation revealed that a handful of 
Chinese individuals control over thirty companies located at this address - 10/F Two Pacific Place, 88 
Queensway, Hong Kong. Thus, for simplicity, this paper refers to this group of investors as the "88 
Queensway Group." 

The 88 Queensway Group's origins are imprecise, and its power structure and relationship to the Chinese 
state remain unclear. Its subsidiaries and their operations have not been linked publicly in media reports. 



1 



Although its companies often are classified as "private" and based in Hong Kong, there is evidence that 
several of its key personnel have ties to Chinese state-owned enterprises and government agencies. The 
Group also has gained high-level access to the governments and national oil companies of the countries in 
which it invests. Often, the 88 Queensway Group appears to circumvent normal investment protocols and 
negotiate business deals directly with the highest levels of governments and oil company executives. The 88 
Queensway Group is active in numerous locations, to include financing infrastructure projects in Angola; 
energy exploration in Argentina; trading crude oil in the Republic of the Congo; construction projects in 
Mo2ambique; airport rehabilitation in Tanzania; a $200 million share of an oil and gas field in Indonesia; and 
stakes in a large infrastructure and civil engineering firm in Singapore. 

Research on the 88 Queensway Group 

Existing 'Literature on the 88 Queensway Group and its Companies 

To date, no publicly available research has identified that the companies run by the 88 Queensway Group are 
associated and coordinated in their operations, despite their being directed by a few Chinese investors with 
extensive contacts with Chinese state and state-owned corporations. Several reports on Sino-Angolan 
relations have discussed the activities of individual companies owned by the 88 Queensway Group, but none 
has identified that all these companies are connected or has examined their ownership structures, personnel, 
investment strategies, and global operations. 1 Most reports that discuss the 88 Queensway Group's 
subsidiaries refer to a $2.9 billion to $9.8 billion oil-backed line of credit that it has supplied to Angola under 
the auspices of one firm, China International Fund Limited. 

Additionally, in researching specific 88 Queensway Group companies, Africa specialists have relied 
predominately on English- and Portuguese-language sources, data provided by the Angolan government, and 
interviews and field research conducted in Angola; they have not cited Chinese-language print media. There 
also have been media reports on the activities of some 88 Queensway Group companies around the world, 
but most of these reports describe various investments or controversies surrounding the activities of an 
individual 88 Queensway Group subsidiary; rarely do these reports associate the Group's global investments 
with its operations in Angola. 

Research Methods 

The following research methods were applied during this project: 



2 



1) Interviews with experts on China's foreign investment, China's national oil companies, and 
Angola's business and politics; 

2) A review of academic literature and open-source media materials and statistics (including non- 
English language sources); and 

3) An examination of official company ownership and financial filings. 

When possible, this research attempts to corroborate reports on China's activities in Angola through 
Portuguese-language and Chinese-language reporting. 

Research Objectives 

In examining the 88 Queensway Group as a case study of China's "going out" strategy, several questions first 
must be answered in order to ascertain whether these investments are state directed or commercially driven, 
and their impact. After reviewing the literature on companies associated with the 88 Queensway Group, the 
following questions remain and have been the focus of the research: 

• What is the extent of the relationship between the 88 Queensway Group and the Chinese 
government? 

• Considering the fact that there is a paucity of information available about the personal and 
professional backgrounds of the 88 Queensway Group, how were its companies able to gain high- 
level access to foreign governments and entry into foreign markets? 

• How was the 88 Queensway Group able to raise the billions of dollars in capital needed to undertake 
its energy, financing, infrastructure, and real estate projects around the world? 

• The 88 Queensway Group's entry into Angola occurred almost simultaneously with Sinopec's 
expression of interest in lucrative concessions in that country. To what extent, if any, are the 
activities of the 88 Queensway Group and Sinopec coordinated? 

• What is the global extent of the 88 Queensway Group's activities? 

• What is the significance of the 88 Queensway Group's activities in the context of China's going out 
strategy? 

• What are the implications of the 88 Queensway Group's activities for the United States? 



Limitations to the Research 

One of the primary conclusions of this research is that there is a paucity of reliable data on Chinese trade, 
tnvestment, and financing globally Publtc records and print medta sources yield limited tnformation about 



3 



the personal and professional backgrounds of executives from the Chinese companies involved in numerous 
African countries, including Angola. 



However, the researchers on this project were able to utilize various Chinese-language message boards and 
blogs that discuss the activities of the 88 Queensway Group companies and the background of their 
personnel. Some information in this paper has been drawn from those sources and will be documented as 
such. 



Additionally, this research has been limited by resources and the inability of the researchers to conduct field 
research in Angola or China. Further information could be gathered from surveying Chinese project sites in 
Angola and conducting interviews with key stakeholders in Angola and China, such as government officials; 
managers and employees of Chinese companies; and current and former laborers who worked on projects 
implemented by the 88 Queensway Group. 

Structure of the Paper 



The body of this paper is divided into four sections. The first section of this paper focuses on the 88 
Queensway Group's organizational structure and examines the Group's origins, corporate power structure, 
and the personal and professional backgrounds of its personnel. The second section is a case study of the 88 
Queensway Group's activities in Angola, the country in which most of the Group's operations are 
concentrated. The third section examines the global scope of the 88 Queensway Group's operations. The 
final segment of the report presents conclusions, including implications for the United States. 



4 



II. PEOPLE AND STRUCTURE OF THE 88 QUEENSWAY GROUP 



Before examining the scope and nature of the 88 Queensway Group's activities in Angola, it is important first 
to understand the origins of this investment group; the key personnel involved in its leadership; and the 
Group's organi2ational structure. At the end of this section, there is a set of diagrams to assist in 
understanding the personnel and organi2ational structure of the 88 Queensway Group. 

The Origins of the 88 Queensway Group 

In the past five years, the individuals leading the 88 Queensway Group have established over thirty different 
holding companies and subsidiaries for investing globally.' While it remains unclear who manages the day-to- 
day operations of the 88 Queensway Group, Hong Kong Company Registry filings provide some insight into 
the ownership structure of the 88 Queensway Group companies. However, it remains possible that even the 
individuals who legally control the 88 Queensway Group's companies do not actually hold power over the 
Group's global activities. 

New Bright International Development Limited (New Bright) was the first company known to be 
associated with the 88 Queensway Group and was incorporated in Hong Kong in 2003. According to the 
registry, New Bright is owned and directed by Ms. Veronica Fung Yuen Kwan (70 percent) and Ms. Lo 
Fong Hung (30 percent), two of the 88 Queensway Group's key individuals. 

The 88 Queensway Group's Key Individuals 

Lo Fong Hung appears to serve as the public face of the 88 Queensway Group, making several public 
appearances on behalf of companies associated with the consortium. 2 Although there is little information 
publicly available about Lo's personal or professional background prior to 2003 (when New Bright was 
incorporated), she is listed currently as the director of no fewer than thirty-four companies incorporated in 
Hong Kong, most of which are listed at the 88 Queensway address. Lo's husband, Mr. Wang Xiangfei, is a 
former director of China Everbright Group and currently is a nonexecutive director of China International 
Trust and Investment Company (OTIC), both state-owned companies in the PRC. 3 China Everbright has 
been identified previously as a company affiliated with Chinese military intelligence, to include a role as a 



1 All information about companies registered in Hong Kong was received from Hong Kong Company Registry filings 
unless otherwise noted. For a complete list of the companies affiliated with the 88 Queensway Group, please see 
Appendix A. 



5 



nominal employer for overseas agents operating under cover. 4 " OTIC is a huge, Chinese state-owned 
conglomerate, incorporating forty-four subsidiaries involved with industries as varied as financial services, 
telecommunications, construction, manufacturing, mining, property development, and media. 5 Wang 
Xiangfei and Lo Fong Hung both have connections to China Petroleum and Chemical Corporation, also 
known as Sinopec, and are listed as officers of Sinopec subsidiaries. 6 While Wang Xiangfei holds official 
leadership positions in at least six of the companies owned by the 88 Queensway Group, it is unclear exactly 
how much control or leadership he exerts within the Group. 

Veronica Fung is the director of at least twenty-four companies incorporated in Hong Kong and, like Lo, has 
little public background before becoming director of New Bright. The only experience found prior to 2003 
was her involvement in Acegain Investments Limited in 1993. The purpose and history of this company is 
unclear, but Fung was listed as a director and owned 50 percent of the shares of Acegain until the company 
dissolved in 2000. 

The remaining 50 percent of shares in Acegain were owned by Mr. Ghiu Ka Leung, who also is known by the 
alias "Sam King." Another individual, named Mr. Xu Jinghua, holds a leadership position within the 88 
Queensway Group and also has been referred to as "Sam King" by Chinese bloggers. 7 It is unclear whether 
these two individuals are in fact the same person. 

The Hong Kong Company Registry lists Li & Partners, a Hong Kong-based law firm, as the secretary for 
New Bright International Development Limited in 2003. One of the partners of this firm was Mr. Kwan 
Man Fai. 8 Since 2003, Kwan has held leadership positions in at least five of the 88 Queensway Group's 
companies, and his law firm has been listed in company filings as secretary for the majority of the 88 
Queensway Group companies. However, Kwan left Li & Partners in early 2008, and after that date the law 
firm was no longer identified on company filings as secretary for the 88 Queensway Group companies. 9 He 
reemerged at the end of 2008 as the representative of the 88 Queensway Group's activities in the United 
States. 

Mr. Wu Yang is the final key individual associated with the 88 Queensway Group companies. Wu Yang is 
the director of no fewer than fourteen companies headquartered in Hong Kong (most of which are located at 
the 88 Queensway address) and, like Lo and Fung, he has little known public background in international 
business. Wu's association with the 88 Queensway Group is significant, because research indicates that he 

n Dr. Howard DeVore, in his 1999 book China's Intelligence and Internal Security Forces, notes that both China 
Everbright and OTIC are believed to be subordinate corporations of the PRC Ministry of State Security's Commission 
of Science, Technology and Industry for National Defense (COSTIND). COSTIND was restructured in 1998 along 
with broader military industry reforms. 



6 



may have ties of an indeterminate nature with the PRC Ministry of State Security, the PRC Ministry of Public 
Security, and/or Sinopec. On company filings, Wu lists his residential address as "No. 14 Dong Chang An 
Street, Beijing, China." This address is the headquarters for the Ministry of Public Safety (MPS), a domestic 
security service of the Chinese government. Also located in this compound is a reception office for the 
Ministry of State Security (MSS), the primary state agency responsible for foreign intelligence activities. 10 
Due to limitations preventing field research, no additional documentation has been found linking Wu Yang to 
either ministry, and it is unknown why he would list this location as his residential address. In addition to his 
potential connection to the PRC intelligence or security apparatus, Wu Yang has also been named in Angolan 
government reports as a vice chairman of Sinopec. Wu is not listed in any of Sinopec's annual reports from 
2001 to 2005, 11 but he is listed as an independent executive director for Beijing Yanhua Up-Dated High-Tech 
Co., Ltd., a Sinopec subsidiary, in Yanhua's annual reports. According to a Beijing Yanhua annual report, Wu 
was director from April 2005 to March 2006, when he resigned. The report also states that Wu was assistant 
general manager of Beijing Yin Kuo Investment Co., Ltd. (^b^lS^TSSWPS^A ^i) and executive director 
of Eastern Fortune Investments Co., Ltd. (^7j M'S'S^WPB^^].) 12 The purpose and history of Beijing 
Yin Kuo Investment Co., Ltd. and Eastern Fortune Investments Co., Ltd. are unclear. 

The 88 Queensway Group's Initial Expansion and Use of Foreign Relationships 

In August 2003, only one month after the incorporation of New Bright International Development Limited, 
Beiya International Development Limited (Beiya) was incorporated in Hong Kong. New Bright owns 70 
percent of the company, and Wu Yang owns the remaining 30 percent. In addition, Lo Fong Hung, Veronica 
Fung, and Wu Yang are all listed as directors of Beiya. Beiya, which changed its name to Dayuan 
International Development Limited (Dayuan) in 2006, was the first known 88 Queensway Group 
company to invest outside China and Hong Kong. 

Please see Figure 1 for a depiction of the 88 Queensway Group's ownership structure at the end of 2003. 



7 



Figure 1: 



88 Queensway Group Top Ownership in 2003 



Veronica Yuen 
Kwan Fung 



Lo Fong Hung 




New Bright 
International 
Development 
Limited 



Wu Yang 




70% 




Dayuan 
International 
Development 
Limited (formerly 
Beiya) 



After incorporating Dayuan International Development Limited, the Group created its first joint venture with 
a foreign enterprise. In April 2004, Dayuan created a joint venture with Espirito Santo Commerce (Escom), a 
subsidiary of the Portuguese bank Espirito Santo Financial Group. The joint venture is called China Beiya 
Escom International Limited, with Dayuan owning 60 percent and Escom owning 40 percent. The 
company's directors include Lo Fong Hung, Wu Yang, and Mr. Helder Bataglia, Escom's president and 
chairman. Helder Bataglia is a Portuguese national who grew up in Angola. His company, Escom, has major 
interests in the airline, agriculture, banking, construction, and diamond sectors in Africa and Latin America, 
particularly in Angola and the Republic of the Congo. 13 In addition, Bataglia is reputed to be a close friend of 
Congolese President Denis Sassou Nguesso, Venezuelan President Hugo Chavez, former Argentine President 
Nestor Kirchner, and Angolan President Jose Eduardo dos Santos. 14 He also has business deals with high- 
level executives in the Russian diamond sector. 15 

The 88 Queensway Group has used China Beiya Escom International Limited as a vehicle for investing in 
Africa and Latin America. Research has found that Helder Bataglia's business and political connections have 
helped the 88 Queensway Group gain access to leaders in Venezula, and he has claimed publicly to have 
convinced the Group to come to Angola as well. In an interview on September 1, 2008, Bataglia stated, "[TJ 
found a group in China and convinced them to come to Angola and invest and cooperate on different 
projects, and [the construction projects in Angola are] part of that program." 16 (Additional information about 



8 



China Beiya Escom International Limited's investments in these countries can be found in sections III and 
IV). 



Please see Figure 2 for a depiction of the 88 Queensway Group ownership structure after the establishment 
of the joint venture with Escom, and the following Figure 3 that details leadership and ownership structure as 
of 2009. 



Figure 2: 



88 Queensway Group Top Ownership in 2004 



Veronica Yuen 
Kwan Fung 



Lo Fong Hung 



70% 




New Bright 
International 
Development 
Limited 



Wu Yang 



Dayuan 
International 
Development 
Limited (formerly 
Beiya) 



Escom — 
Espirito Santo 
Commerce 
Limited 



(50% 



China Beiya 

Escom 
International 
Limited 



9 



Figure 3: 



88 Queensway Group Directors and Companies as of 2009 

(♦Companies not located at 88 Queensway address) 



Lo Fong Hung 



Veronica Fung 



Wu Yang 



Wang Xiangfei 



Kwan Man Fai 



AC Jet International 
Artfield Group Ltd. 
Beijing Tian Qiao Cultural 
Developments., Ltd. 
Bright Fair Ltd. 

China Africa Development Holding 
Ltd. 

China Beiya Escom International Ltd. 

China Hong Kong Power & Water 

Engineering Ltd. 

China Hong Kong Hydropower 

Engineering Co. Ltd. 

China International Fund Airport 

Construction Co. Ltd. 

China International Fund Ltd. 

China Sonangol Asia Ltd. 

China Sonangol Asset Management 

Ltd. 

China Sonangol Engineering & 
Construction Co., Ltd. 
China Sonangol Exploration & 
Production Ltd. 

China Sonangol Finance International 
Ltd. 

China Sonangol Gas International 
Ltd. 

China Sonangol International Ltd. 
China Sonangol International Holding 
Ltd. 

China Sonangol Natural Resources 
International Ltd. 

China Urban Development Holding 
Co., Ltd. 

CSG Automobile Ltd. 

Dayuan International Development 

Ltd. 

Deltop Ltd.* 

Endiama China International Holding 
Ltd.* 

Global Investments Fund Ltd. 
J oyce Link Investments Ltd.* 
New Bright International 
Development Ltd. 
Progress Team Ltd. 
Right Year Investment Ltd. 
SNPC Asia Development Ltd. 
SNPC Asia Holding Ltd. 
SNPC Asia Trading Ltd. 
Sonangol Asia Ltd. 
Wide Action Investment Ltd. 
Worldpro Development Ltd.* 



Acegain Investments Ltd.* 

China Beiya Escom 
International Ltd. 

China Hong Kong 
Hydropower Engineering Co., 
Ltd. 

China Hong Kong Power Si 
Water Engineering Ltd. 

China International Fund 
Airport Construction Co., Ltd. 

China International Fund Ltd. 

China Sonangol Asia Ltd. 

China Sonangol Engineering 
& Construction Co., Ltd. 

China Sonangol Exploration 
& Production Ltd. 

China Sonangol Finance 
International 

China Sonangol Gas 
International Ltd. 

China Sonangol International 
Investment Ltd. 

China Sonangol International 
Holding Ltd. 

China Sonangol International 
Ltd. 

China Sonangol Natural 
Resources International Ltd. 

China Urban Development 
Holding Co., Ltd. 

Dayuan International 
Development Ltd. 

Global Investments Fund Ltd. 

New Bright International 
Development Ltd. 

SNPC Asia Development 
Co., Ltd. 

SNPC Asia Holding Ltd. 
SNPC Asia Trading Ltd. 



China Hong Kong Power S: 
Water Engineering Ltd. 

China International Fund 
Ltd. 

China Sonangol Asia Ltd. 

China Sonangol 
Engineering & 
Construction Co., Ltd. 

China Sonangol 
Exploration & Production 
Ltd. 

China Sonangol Finance 
International Ltd. 

China Sonangol Gas 
International Ltd. 

China Sonangol 
International Investment 
Ltd. 

China Sonangol 
International Holding Ltd. 

Dayuan International 
Development Ltd. 

Fast Sea Investments 
Ltd.* 

Beijing Yanhua High Tech 
Updated Holding Co., Ltd.* 

Beijing Yin Kuo 
Investment Co., Ltd.* 

Eastern Fortune 
Investments Co., Ltd.* 



Artfield Group Ltd. 

China Beiya Escom 
International Ltd. 

China CITIC Bank* 

China Everbright 
International* 

China Everbright Ltd.* 

China Hong Kong 
Power & Water 
Engineering Ltd. 

Chongqing Iron & Steel 
Co., Ltd.* 

Deltop Ltd.* 

New Bright International 
Development Ltd. 

SEC Media Group Ltd.* 

Shenzhen Rural 
Commercial Bank* 

HKC (Holdings) Ltd. 
Co.* 

Tianjin Capital 
Environmental 
Protection* 

China Sonangol 
International Holding 
Ltd. (Deputy CFO) 

Plus Holdings Ltd.* 

Sonangol Sinopec 
International Ltd. (Vice 
CFO) 



Artfield Group Ltd. 

Li & Partners* 

Progress Team 
Ltd. 

RightYear 
Investment Ltd. 

Wide Action 
Investment Ltd. 

CS Wall Street 
(Vice President)* 



10 



III. CASE STUDY: ANGOLA 



Angola's Postwar Economic and Political Climate 

Following the end of Angola's civil war in 2002, political authority in the country was centrali2ed around 
President Jose Eduardo dos Santos, who had been in power since 1979 and remains in power to this day. 17 
President dos Santos's power virtually is uncontested, and other governmental institutions, the armed forces, 
and corporations (including Angola's state-owned oil enterprise) are subservient to the presidency. Angolan 
government ministries report directly to the presidency and have little contact with one another — a system 
that has resulted in factionalism and competition among ministries for access to the president. 18 As a result 
of decades of civil war and poor economic management, commercial activity in Angola is dominated by the 
extractive sector. 19 Angola is currently the second-largest oil producer in sub-Saharan Africa, and crude oil 
accounts for 80 percent of government revenues. 20 

The principal Angolan institution in the petroleum sector is Sonangol, a state-owned oil enterprise currently 
led by Chairman Manuel Domingos Vicente. Sonangol remained "the only competent state institution" 
during the civil war, when attrition and mismanagement led to the implosion of most state-owned 
companies. 21 Though subservient to the presidency, Sonangol is not micro-managed and has resisted 
successfully efforts by government institutions — such as the Ministry of Petroleum and the National Bank of 
Angola — to encroach upon its power. 22 In recent years, Sonangol has made strategic business acquisitions in 
new sectors, such as banking and aviation, in Angola and internationally. This move has prompted some to 
liken Sonangol to a sovereign wealth fund. 23 

The Angolan government's vision for economic development advocates a top-down, centrally planned 
approach with a heavy emphasis on attracting foreign investment, undertaking large-scale public works 
projects, and using external borrowing to build and reconstruct the country's shattered infrastructure. 24 
Angola's strained relations with the International Monetary Fund (IMF) combined with its need for external 
financing and expertise for reconstruction have prompted the government to search for new lenders and 
development partners. Among the partners it found was China. 

China's Entry into Angola 

The conclusion of Angola's civil war in 2002 coincided with President Jiang Zemin's pronouncement of the 
"going out" strategy. Chinese private and state-owned firms began seeking access to new markets to expand 



11 



their international operations, including seeking access to resource-rich Angola. These enterprises, namely 
construction and petroleum firms, appeared especially attractive to Angolan political leaders, because they 
could partner in rebuilding Angola's weakened infrastructure and would provide financing with loans. 
Additionally, Chinese loans had fewer political conditions — such as transparency requirements and 
government reforms — than loans from international financial institutions. 

Official Lines of Credit to Angola from the Chinese Government 

The Chinese government has extended official lines of credit to Angola through several of its policy banks. 
The first official Chinese lines of credit to Angola were extended in 2002, when the China Construction Bank 
(CCB) and the Export-Import Bank of China (China Ex-Im Bank) financed $150 million in construction 
projects in Angola. This amount was later dwarfed by several oil-backed lines of credit extended by China Ex- 
Im and a $1 billion loan from China Development Bank (CDB). m 

China Ex-Im Bank Financing in Angola 

Since 2004, China Ex-Im Bank has extended at least $4.5 billion in oil-backed loans to finance major 
construction projects in Angola. China Ex-Im Bank and the Angolan government have entered into three 
major financial deals: 1) a $2 billion line of credit payable over twelve years at an interest rate of Libor iv plus 
1.5 percent approved on March 21, 2004; 2) an extension of $500 million to finance "complementary actions" 
to projects tied to the first loan; and 3) an additional $2 billion loan to be repaid over fifteen years with an 
interest rate of Libor plus 1.25 percent. 25 Further, China Ex-Im Bank and the Angolan Ministry of Finance 
currently are negotiating a new $1 billion loan. 26 

For the projects funded by these loans, the Chinese and Angolan governments share responsibility for 
selecting both the projects and firms to tender contracts. A joint committee composed of representatives 



m Another state-owned Chinese company, Zhong Xing Telecommunication Equipment Company Limited (ZTE), 
agreed to invest $400 million in Angola. About $300 million of this investment was earmarked for the modernization 
and expansion of Angola Telecom's fixed line network. The Angolan government said that the final $100 million would 
be invested in military communications, the development of a mobile telephone factory, and the creation of a 
telecommunications training institute for Angolan employees. Afrol News, "China, Angola sign 9 cooperation 
agreements," March 7, 2005. 

lv The London Interbank Offered Rate (Libor) is an interest rate at which banks can borrow funds, in marketable size, 
from other banks in the London interbank market. Libor is fixed on a daily basis by the British Bankers' 
Association. Libor is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for 
larger loans with maturities between overnight and one full year. 



12 



from the Chinese Ministry of Commerce (MOFCOM) and the Angolan Ministry of Finance selects projects 
from proposals submitted by different Angolan ministries. To date, China Ex-Im Bank-financed projects in 
agriculture, education, energy, infrastructure, public works, telecommunications, and transportation are in 
progress or have been completed. 27 

The loan agreement signed between the China Ex-Im Bank and the Angolan government stipulates that the 
contracts tied to the loan are allocated primarily to Chinese firms and that most of the building materials and 
machinery should be sourced from China. The Chinese government has compiled a list of thirty-five 
construction companies pre-approved to tender for contracts tied to the loan, although efforts to acquire this 
list have been unsuccessful. 28 These companies reportedly were selected due to their positive track records 
and ability to complete projects in an efficient, timely manner. 29 About 30 percent of contracts have been 
awarded to Angolan companies. 30 In interviews conducted for this research, Angolan experts regarded these 
loans as quite transparent and a positive contribution to Angola's reconstruction and development. 

China Development Bank 's Loan to Angola 

In April 2008, negotiations for a financing agreement began between the Angolan Mnistry of Finance and 
China Development Bank (CDB). 31 It is unclear who initiated these negotiations. After meeting with 
President dos Santos in March 2009, Mr. Chen Yuan, chief executive officer of CDB, announced that it 
would extend a loan of at least $1 billion to Angola for projects in the agricultural sector. 32 Unlike the loans 
channeled through China Ex-Im Bank, this line of credit is not backed by crude oil sales. After the 
announcement was made, Yuan stated that "the amount could be insufficient and it may be increased to meet 
the needs of Angola." 33 

The 88 Queensway Group's Entry into Angola 

In June 2004, the 88 Queensway Group, through China Beiya Escom International Limited, created a joint 
venture with Angola's national oil company, Sonangol. The joint venture is called Sonangol Asia Limited v 
and is located at the 88 Queensway address. China Beiya Escom owns 60 percent of Sonangol Asia Limited, 
and Sonangol owns the remaining 40 percent. The directors of the company are Lo Fong Hung, Wu Yang, 

v It is unclear what the purpose of Sonangol Asia Limited was when it was first established in June 2004. The company 
has not been reported as having any specific projects in Angola. However, a Sonangol subsidiary by the name of 
Sonangol Asia has an office in Singapore. In 2006, the Singaporean office's president, Hermenegilda Lopes, stated that 
Sonangol Asia is responsible for marketing, trading, operations, administration, and financial supervision of Sonangol's 
Asian petroleum market. It is unclear, however, if the Sonangol Asia in Singapore is the same Sonangol Asia Limited 
that is registered in Hong Kong and is affiliated with the 88 Queensway Group. "Eastern Approach," Universo 
(magazine published by Sonangol E.P.), Issue 9 (Spring 2006). 



13 



and Manuel Domingos Vicente (director and chief executive officer [CEO] of Sonangol). As a result of 
these contacts in 2004, the 88 Queensway Group was able to arrange for massive projects in Angola's energy 
and infrastructure sector. The two major vehicles for these investments in Angola were the following: 

• China International Fund Limited (CIFL): Involved in management and financing of 
construction projects. CIFL has provided at least $2.9 billion to Angola for infrastructure 
reconstruction. 

• China Sonangol International Holdings Limited: Involved in management and operation of 
energy sector projects. China Sonangol has obtained concessions of three oil blocks and 
established a joint venture with Sinopec for oil exploration in Angola. 

China International Fund Limited 

China International Fund Limited originated as a subsidiary of Dayuan International Development Limited 
and was incorporated in Hong Kong in November 2003. Dayuan owns 99 percent of CIFL, and Lo Fong 
Hung owns the remaining 1 percent. The directors named on CIFL company filings are Wu Yang, Lo Fong 
Hung, and Veronica Fung. Like the other 88 Queensway Group companies, the secretary listed on filings for 
CIFL is Kwan Man Fai's law firm, Li & Partners. 

CIFL's Activities in Angola 

China International Fund Limited first attracted media attention in late 2004-early 2005, when it extended a 
$2.9 billion to $9.8 billion oil-backed line of credit (different authors have reported different figures) for 
major infrastructure projects to be carried out by Chinese construction companies in Angola. 34 The Angolan 
Finance Ministry referred only to an "initial financing facility" from CIFL worth $2.9 billion, presumably with 
an additional $6.9 billion reserved for future projects. 35 Financial documents from the Hong Kong Company 
Registry indicate that CIFL took out four loans over the course of three years in order to pay for its 
infrastructure projects, although financial documents do not contain exact figures for the amount of money 
for each loan. The banks providing these loans include the following: Bank of China (branch in Hong Kong) 
Limited; Calyon (a French bank); and Wing Hang Bank, Limited (based in Hong Kong). 



14 



China International Fund Limited "Partners and Allies" 

On its Web site, China International Fund Limited lists a number of companies and institutions as "partners 
and allies." The Web site does not list why these organi2ations are considered allies; however, media reports 
frequently document the signing of contracts between CIFL and many of the companies listed. Additionally, 
the banks on the Web site have financed past loans for the 88 Queensway Group. CIFL's partners and allies 
include the following: 

Financial sector: Bank of China (Hong Kong) Limited; Calyon Corporate and Investment Bank; Societe 
Generale Corporate & Investment Banking 

Engineering sector: New World Development Company Limited; Hangxiao Steel Structure; Jiangsu 
Construction Engineering Group Co. Limited; Beijing Construction Co., Limited (Group) 

Automobile and machinery sectors: Dongfeng Motor Corporation; Guangxi Liugong Co., Limited; 
Chongqing Hongyan Co., Limited; Shantui Construction Import & Export Machinery Co., Limited; Volvo 
Construction Equipment (China) Co., Limited; Baotou Beifang Benchi Heavy Duty Track Co., Limited; 
China National Heavy Duty Truck Group Co., Limited (Sinotruk); Xuzhou Construction Machinery Group 
Co., Limited (XCMG); Zhengzhou Nissan Automobile Co., Limited; Changsha Zoomlion Heavy Industry 
Science & Technology Development; China South Locomotive and Rolling Stock Industry (Group) Corp. 



The China Ex-Im Bank loans and CIFL loans to Angola have three similarities: 1) the amounts are 
comparable ($4.5 billion from Ex-Im and $2.9 billion or more from CIFL); 2) the loans supplied by the China 
Ex-Im Bank and CIFL to Angola are all oil backed, with an assured supply of oil written into the contract; 
and 3) each loan is tied to major reconstruction projects, most of which will be completed by Chinese 
companies. However, there are distinct differences in the level of transparency and the Angolan institutions 
that manage each line of credit. 

While China Ex-Im Bank's lines of credit to Angola are administered in a relatively transparent manner by the 
Angolan Ministry of Finance, CIFL loans are administered by Angola's reconstruction office, Gabinete de 
Reonstrugao Nacional (GRN), and governed with little transparency. 36 The GRN was established in 2004 
by Angolan President Jose Eduardo dos Santos and is controlled by General Helder Viera Dias, also known 
as "Kopelipa," dos Santos's leading military and intelligence advisor. According to Angolan media reports, 
the establishment of the GRN was in direct response to political rivalries within the state and Angolan 



15 



businessmen and political officials seeking to benefit illegally from the Chinese money. Following the rumors 
of corruption, Angola's finance minister visited Beijing, and almost immediately upon his return, President 
dos Santos created the GRN. 37 According to Manuel Ennes Ferreira, an expert on Sino-Angolan relations, 
"rumors surfaced that it was the Chinese Secret Services ... that warned the Angolan Presidency [about the 
corrupt practices], going as far as providing President dos Santos with a list of twenty businesses connected 
with the elite Angolans said to be illicitly benefiting from the newly available resources." 38 

The 88 Queensway Group's opacity is supported by a lack of transparency within the GRN. According to 
Africa Asia Confidential, the GRN structure "muddles state finances," with the Angolan Ministry of Finance 
knowing few details about GRN activities or expenditures. 39 While the financial flows of the GRN are 
supposed to pass officially through the Ministry of Finance's accounts, management is reserved for the GRN 
and Kopelipa. One Angolan reporter stated in 2006, "Provincial governors and other senior regional 
politicians are in a constant state of waiting for a governmental Messiah to turn up that will enlighten them on 
the real intentions of the GRN, currently managing the billions of U.S. dollars from Chinese loans." 40 



CIFL Personnel 



One of the Chinese individuals reportedly in charge of CIFL operations (and potentially other 88 Queensway 
Group activities) in Angola is Mr. Xu Jinghua. In multiple media reports, Xu is said to be the chairman of 
the board of Dayuan and CIFL. 41 However, he is not listed on official registry documents as being a director 
or shareholder of any of the 88 Queensway Group companies. According to business media and Chinese 
bloggers in mainland China, Xu controls both oil trading and infrastructure construction operations in 
Angola. 

Bloggers and former CIFL personnel also note that Xu has gone by several aliases since working with CIFL; 
among these are Xu Songhua, Sa Muxu, Samo, and "Sam King." 42 As mentioned in the section above, it 
remains unclear whether or not Xu Jinghua is the same "Sam King" who owned half of Acegain Investments 
Limited with Veronica Fung in 1993. According to a Chinese-language media source, Xu Jinghua may also 
refer to himself as "Sam Pa" or "Sampa," vi which is the same name as one of the individuals who participated 
in a 2004 delegation to Buenos Aires along with Lo Fong Hung and Helder Bataglia. 43 "Sampa" was 
described by Argentine media at the time as a "Cambodian who was affiliated with China Beiya Escom." 44 

vi In an article from Guangxi Daily News on July 14, 2007, one 88 Queensway Group company is described as signing 
agreements with several construction companies in Guangxi. Representing the 88 Queensway Group was a man named 
"Sampa." The article also refers to the same person as "Mr. Xu." While it is unclear if this Mr. Xu is referring to Xu 
Jinghua, because of the similarities between the name Sampa and his additional aliases, it is possible they are the same 
person. 



16 



Asia Times reported in March 2007 that Xu has "cozy relationships" with Angola's political and military 
leadership. 45 These relationships may be the result of ties developed during Angola's civil war. Several 
Chinese bloggers have noted that Xu is rumored to have been involved in arms sales to the Angolan military 
during the Angolan civil war. 46 These claims have yet to be substantiated. 

Another individual documented as controlling CIFL projects in Angola is Mr. Ju Lizhao. Ju is reportedly 
the CIFL director stationed in Angola, although he is not listed on any official company documents. 47 Ju 
potentially represents an important personnel connection between the 88 Queensway Group and China's 
People's Liberation Army (PLA). He is a former senior colonel for the PLA General Staff Department 
Foreign Affairs Division, the military office responsible for military exchanges in China. 48 Four years after 
retiring from the PLA, Ju was reported to have begun associating himself with China International Fund 
Limited. 49 



CIFL's financing of infrastructure and construction projects in Angola has been its most publicized work. 
CIFL has financed the construction of housing projects, public utilities, railways, highways, airports, and 
stadiums. For a complete list of projects, please refer to the text box below and to Appendix B. 50 Contracts 
for projects financed by CIFL are reserved for companies selected by the 88 Queensway Group. These 
projects have been awarded to two types of companies: 1) Chinese construction companies with connections 
to individuals involved in the 88 Queensway Group, including China Railway 20 th Bureau Group Corporation 
and Hangxiao Steel Structure; and 2) joint venture companies established by CIFL and selected Chinese 
companies with specific expertise, such as the 88 Queensway Group joint venture with Guangxi Guineng 
Engineering Consulting Company called China Hong Kong Power & Water Engineering Limited. Few of the 
names of the companies that have been awarded projects by CIFL in Angola have been publicized by media 
reports. Of the companies known to be funded by CIFL, most are not based in Hong Kong but instead are 
Chinese state-owned companies, companies listed on the Shanghai stock exchange, and unlisted private 
companies based out of the mainland. 

According to Indira Campos and Alex Vines of Chatham House (also known as the Royal Institute of 
International Affairs), "disbursements from the [CIFL] credit line are paid on a project- by-project basis to 
Chinese contractors and suppliers." 51 Because of opaque and limited reporting of financial and construction 
information about the projects, it is unclear how much of the original loan has already been disbursed. 
However, when CIFL signed a 34.4 billion RMB ($5 billion) housing construction contract with a Chinese 
steel company in 2007, Xu Jinghua told the Asia Times that the contract was "no more than a slice of his big 
Angola construction business pie, which could be worth as much as $30 billion." 52 



17 



CIFL has also made inroads into Angola's diamond industry. In April 2005, the Angolan Council of 
Ministers, including all government ministers and vice ministers, approved a joint venture agreement between 
Endiama EP (the Angolan state-owned diamond company) and CIFL. In this joint venture, the Council 
authorized Endiama EP to participate in the creation of a Hong Kong-based company called Endiama China 
International Holdings Limited. The agreement gave Endiama China "financial and technical capacity, as well 
as practical capability in developing diamond prospecting, assessment and exploitation programs." 53 



Projects Financed by China International Fund Limited in Angola™ 

> Housing: 215,500 units of public housing in Luanda and in seventeen other provinces 

>• Automobiles: Industrial Park with total annual production capacity of thirty thousand sport utility 
vehicles (SUVs) 

> Public utilities: Repair of drainage and water supply in Luanda, Senado da Camara, Rio Seco, Surcoa, 
and Cazenga 

^ Highways and roads: Highway from Luanda to Lobito; road restoration projects throughout Angola 

> Railways: Construction of Luanda Railway and Benguela Railway; imports of locomotives and rolling- 
stock 

> Airports: Construction of the largest airport in Africa, New International Airport of Luanda 

^ Office buildings: twenty-four-story CIFL headquarters building; new National Administration Complex 
to house the Angolan Presidential Palace, Parliament House, Supreme Courts, offices for new ministries 

> Water/hydro-electric: Dredging the Luanda seafront and upgrading drainage; irrigation and hydro- 
electricity on the Kwanza River 

^ Logistics bases: in Luanda, Benguela, and Namibe to support CIFL projects and corporations 

> Nova Luanda: Financing for the $3.5 billion entirely new urban center designed to be a satellite for the 
overcrowded capital, which is being constructed by CITIC™ 



China's Activity in Angola's Petroleum Sector: Sinopec and China Sonangol 

Sinopec's Entry into Angola 



™ Information about projects was taken from CIFL Web site: www.chinaintemationalfund.com 

™ It is unclear if the entire financing for Nova Luanda is coming from CIFL. Reports of CIFL financing for the project 
began in 2007. However, OTIC only began work on the project in September 2008. 



18 



In mid-2004, shortly after the announcement of China Ex-Im Bank's financing agreement with the Angolan 
government, Sinopec made a contentious move to establish a presence in Angola. Sinopec aggressively 
sought to acquire a stake in block 18, an oil block from which Royal Dutch/Shell decided to withdraw. This 
was controversial, because Shell had agreed in October 2003 to sell the block to ONGC-Videsh, the 
international branch of India's state-owned Oil and Natural Gas Corporation (ONGC). 54 Over the next 
several months, executives from Sinopec and Sonangol met multiple times in Angola and China, including 
three visits to China by Sonangol Chairman Manuel Domingos Vicente. During the same time period 
,President dos Santos declined India's invitation to visit New Delhi and refused to receive Indian Oil Minister 
Mani Shankar Aiyar in Angola's capital, Luanda. ONGC-Videsh eventually was sidelined by Sinopec's offer 
of an estimated $725 million for a 50 percent stake in the concession. Some critics of the deal have claimed 
that China Ex-Im Bank's extension of loans to Angola in the months prior provided Sinopec with an unfair 
advantage over its Indian competitor. 55 

China Sonangol 

In addition to meeting with Sinopec representatives in his 2004 visits to China, Manuel Vicente dedicated a 
portion of these visits to meeting with 88 Queensway Group directors. Almost immediately following his 
August 2004 visit, when it was announced that Sinopec was pursuing block 18, Vicente (on behalf of 
Sonangol) formed a joint venture with the 88 Queensway Group called China Sonangol International 
Holdings Limited. The 88 Queensway Group (through Dayuan International Development Limited) owns 
70 percent of China Sonangol, and Sonangol owns the remaining 30 percent. The four directors of the 
company are Lo Fong Hung, Veronica Fung Yuen Kwan, Wu Yang, and Manuel Vicente. The joint venture 
was incorporated officially in Hong Kong on September 8, 2004, and China Sonangol is the 88 Queensway 
Group's major actor in Angola's petroleum sector. In the weeks following China Sonangol's incorporation, 
Vicente and the 88 Queensway Group also incorporated nine subsidiaries of China Sonangol. 

China Sonangol is the client of a prominent international consulting firm called Pierson Asia. Pierson Asia 
speciali2es in helping Chinese companies set up business in Angola. Other Chinese clients include OTIC 
and Zhen Hua Oil, the oil trading arm of Chinese state-owned armaments and engineering firm China North 
Industries Corporation (NORINCO). 56 The owner and director of Pierson Asia is Mr. Pierre Falcone. 
Falcone, born in French Algeria, was involved heavily in an international oil-for-arms scandal called 
Angolagate. In 1993, the son of former French President Francois Mitterand, a Russian diamond magnate, 
and Falcone all were involved in a deal to sell $791 million of Russian arms to the Angolan government 
during its civil war. 57 In the years since Angolagate, Falcone's relationship with President Jose Eduardo dos 
Santos of Angola has remained strong. Their relationship is so pronounced that when Falcone was arrested 



19 



for his activity in Angolagate in 2003 by French authorities, dos Santos appointed him as the Angolan 
ambassador to the United Nations cultural organi2ation UNESCO in order to procure diplomatic immunity 
for Falcone. 58 Also, Falcone reportedly is close to Angolan retired general and senior intelligence advisor 
General Kopelipa, as well as to the chairman of Angola's national oil company, Manuel Vicente. 59 

In the energy sector, China Sonangol is involved in petroleum exploration and production and crude oil 
trading and formerly was slated to participate in the construction and management of a petroleum refiner)'. It 
has a 25 percent stake in the exploration of blocks 3/05 and 3/05A and reportedly is a partner in Sonangol 
Sinopec International (SSI), a joint venture agreement with Sinopec. Through SSI, China Sonangol and 
Sinopec are involved in the exploration and production of four oil blocks in Angola: 15(06), 17(06), 18(06), 
and 18. In March 2006, Angola announced that Sonangol Sinopec International (SSI) had been chosen as its 
partner in the construction of a new refinery, called Sonaref, to be located at the port city of Lobito, 373 
miles south of Angola's capital, Luanda. Construction of the Sonaref refinery was expected to cost an 
estimated $3 billion. The refiner}' was to be Angola's largest, with a refining capacity of 240,000 barrels per 
day and would employ eight thousand when fully operational. As described below, negotiations about the 
refiner}' fell apart, and SSI is no longer involved in the project. 60 



China Sonangol's Links with Sinopec 

Reports conflict as to whether China Sonangol is involved with Sonangol Sinopec International or not. In 
2005, Energy Compass reported that SSI is a joint venture between Sinopec and China Sonangol but also stated 
that each partner's share remains confidential. 61 Campos and Vines of Chatham House claim that SSI is a 
joint venture between Sonangol and Sinopec, in which Sinopec Group holds a 55 percent stake, and the 
remaining 45 percent belongs to Sonangol. There is evidence that China Sonangol is involved in several 
aspects of SSI's operations in Angola, including participation in a crude oil off-take agreement ix with a 
Sinopec subsidiary and involvement in several of Sinopec's financing arrangements for projects in Angola. 

Several of the 88 Queensway Group's key personnel hold positions with SSI and other Sinopec subsidiaries. 
Wang Xiangfei is listed as the vice chief financial officer of the joint venture, and Lo Fong Hung is a director 
of the company. Additionally, a statement issued by the Angolan government in 2006 and an Angolan 
newspaper article mention Wu Yang by name, and each refer to him as the "vice director" of Sinopec. 62 
Between 2005 and 2006, Wu was also independent nonexecutive director of Beijing Yanhua Up-Dated High- 
Tech Co., Ltd., a subsidiary of Sinopec located in Beijing. 

a An off-take agreements an agreement to purchase all or a substantial part of the product produced by a project, 
which typically provides the revenue stream for a project financing. 



20 



China Sonangol also is involved in a major oil-financing agreement between Sonangol and a consortium of 
European banks led by France's Calyon Bank. A $3 billion financing agreement concluded on September 7, 
2005, is backed by oil revenues secured through a long-term off-take agreement between Sonangol and China 
Sonangol with the oil destined for the Chinese market. China Sonangol has a corollary off-take agreement 
with China International United Petroleum & Chemicals Co., Ltd. (Unipec), a subsidiary of Sinopec. Unipec 
is one of a select few companies with a license to import crude oil into China. Additionally, Sinopec serves as 
the guarantor for this loan agreement. China Sonangol is only an intermediary in this financing agreement, 
and thus it is unclear exactly why they are involved, because Unipec is ultimately the buyer of the oil. 

China Sonangol's activity has been limited neither to Angola nor to the petroleum sector. The joint venture 
created between the 88 Queensway Group and Sonangol has provided the Group with access to the airline 
owned by the national oil company, Sonair. China Sonangol holds a 30 percent stake in Sonair and has 
acquired at least two Airbus A-319 aircraft in Angola. 63 Additionally, China Sonangol and China 
International Fund Limited sponsor an eighteen-year-old Angolan Formula One racecar driver, Luis Sa Silva, 
who competes throughout Asia and Europe. 64 The Sino-Angolan joint venture also has begun investing in 
real estate and manufacturing elsewhere in Africa, Latin America, and the United States. In this regard, China 
Sonangol's activities are similar to those of a private equity fund. See section V for more details on the global 
scope of the 88 Queensway Group's investments. 

The 88 Queensway Group's Problems in Angola 

After experiencing a relatively smooth entrance into the Angolan market, the 88 Queensway Group hit 
several major roadblocks in 2007. As detailed below, agreements began to unravel and Group-funded 
projects began to stall; it appears that the relationships the Group had with the Angolan government, and 
perhaps the Chinese government, began to deteriorate as well. 

The Collapse of Sonaref Negotiations 

In early March 2007, plans for Sinopec Sonangol International to construct the Sonaref refinery in Lobito, 
Angola, were called off when Sinopec pulled out of negotiations. One of the main reasons for cancelling the 
deal was a disagreement between Sinopec and Sonangol over which markets would be designated to receive 

x In this context, a guarantor s a party who agrees to guarantee repayment of a loan. 



21 



Sonarefs refined petroleum products. The Angolan government disapproved of the plan that Sinopec 
proposed, which stipulated that 80 percent of Sonarefs production would be exported to foreign markets, 
especially since Angola regularly experiences domestic shortages of oil by-products. 65 Manuel Vicente, 
chairman of Sonangol, offered public criticisms about this prospect, telling the Angolan media, "We cannot 
construct a refiner}' just to make products for China." 66 In contrast, Chang Hexi, the Chinese economic 
counselor in Luanda, claimed that Sinopec's negotiators backed out of negotiations because the company 
simply was not interested in the project. 67 

In November 2008, it was announced that Sonangol would hire KBR, an American engineering firm that split 
away from Halliburton in April 2007, to design and oversee the construction of Sonaref. Construction began 
in January 2009 and is expected to be done in four years. 68 

Cancellation of the 88 Queensway Group's Partnership with Undiama 

In early March 2007, the Angolan Council of Ministers cancelled the partnership between Endiama, Angola's 
state diamond company, and China International Fund Limited. This partnership was established in 2005. 69 
Despite the cancelled partnership, Endiama China International Holdings Limited, the Hong Kong company 
created as part of the agreement, still is listed as an active corporation, according to documents obtained from 
the Hong Kong Companies Registry. 70 

Hangxiao Steel Structure's Insider Trading Case 

In March 2007, Hangxiao Steel Structure, a Shanghai-listed company subcontracted by the 88 Queensway 
Group to undertake a 34.4 billion RMB housing construction project in Angola, became embroiled in a very 
public controversy after signing a $4.4 billion contract with CIFL for a housing development project in 
Angola called "Residents' Heaven." 71 The company came under scrutiny at the beginning of March, when its 
share prices surged 10 percent (the daily limit for price increases on the Shanghai stock exchange) for ten 
straight days. A subsequent investigation by the China Securities Regulatory Commission (CSRC) found that 
the company had released prematurely the details of the Angolan project to shareholders. 72 In early 2008, a 
Chinese court found three former Hangxiao Steel executives guilty of insider trading and sentenced them to 
eighteen to thirty months in prison. 73 Hangxiao Steel's association with CIFL thrust the 88 Queensway 
Group into the spotlight as the media tried to uncover details of the contract. However, there are no public 
reports of any official investigation of CIFL with respect to the insider trading case. 74 



22 



In response to questions about its relationship with China International Fund Limited, the Chinese Ministry 
of Foreign Affairs attempted to distance itself from the controversy and did not try to deflect public 
criticisms of the 88 Queensway Group. In a March 2007 interview with the Chinese-language First Finance 
Daily Newspaper^ a spokesperson from the Chinese embassy in Angola said, "We are not familiar with CIFL's 
background, but all their projects that have been built in Angola are not good." 75 In addition, a commercial 
counselor from the Chinese embassy in Angola said, "We are not the direct department in charge of Chinese 
Angolan economic cooperative efforts, but we never saw [CIFL] emerge in any of the public exercises and 
meetings between the Chinese government and the Angolan government." 76 

Sinopec Relinquishes Several Recently Acquired Oil blocks 

Finally, in November 2007, it was reported that SSI had relinquished its stake in three of the oil concessions it 
had acquired recently. According to Indira Campos and Alex Vines of Chatham House, the Portuguese firm 
Galp Energia SGPS would replace Sinopec permanently on the oil blocks, but China Sonangol was "taking 
on the blocks temporarily until a permanent equity partner" was confirmed. China Sonangol's willingness to 
work on these oil blocks despite Sinopec's departure suggests that business decisions for the two 
companies — SSI and China Sonangol — may be made by different executives or governing bodies. 

Sea Success Maritime, Inc., Files Fawsuit against CIFF 

On June 1, 2009, Sea Success Maritime, Inc., a subsidiary of Hong Kong-based Lihai International 
Shipping Company, filed a lawsuit against CIFL in the New York Southern District Court demanding 
$257,000 in fees and damages. In October 2008, Sea Success and CIFL had signed a maritime contract under 
which CIFL was to charter a vessel owned by Sea Success in order to "ship a cargo of around 20,000 [cubic 
meters] of lawful and harmless general cargo and four containers of fireworks from Taicang and 
Zhangjiagang, China, to Luanda, Angola. Sea Success claims that CIFL is delinquent on payments for these 
services." 77 

The Future of the 88 Queensway Group in Angola 

The 88 Queensway Group has been able to continue operating in Angola and elsewhere around the world 
despite the major setbacks detailed above. Media sources in Angola and scholars knowledgeable about Sino- 
Angolan relationships continue to report on the progress that has been made on CIFL projects, and new 
reports about other 88 Queensway Group subsidiaries' global investments continue to be released in news 
circuits. 78 



23 



Following months of steady decline in the price of oil, in December 2008 Angolan President dos Santos and 
Sonangol Chairman Manuel Vicente travelled to Beijing to meet with President Hu Jintao. While Xinhua 
notes that dos Santos's visit was to "further strengthen the political and economic relations between the two 
countries," 79 Richard Segal of United Bank of Africa told Reuters, "It seems that Angola is returning to its 
initial strategy of asking China for loans, as the financial crisis makes it too expensive to borrow from the 
West." 80 During the Angolan delegation's visit to China, Li Ruogu, president of China Ex-Im Bank, 
announced, "We are planning to expand cooperation with the Angolan Ministry of Finance." 81 The increase 
of the already promised $4.5 billion China Ex-Im Bank credit line points to the deepening ties in the Sino- 
Angolan relationship. This also was highlighted when PRC Minister of Commerce Chen Deming traveled to 
Angola in January 2009 and met with Angolan Prime Minister Antonio Paulo Kassoma, pledging Chinese 
support for Angola's agriculture sector. 82 At this meeting, Chen also announced that bilateral trade volume 
between China and Angola had reached $25.3 billion in 2008, establishing Angola as China's largest African 
trade partner. 83 In addition, on March 13, 2009, the president of the China Development Bank announced a 
$1 billion loan that will be given to Angola for the agriculture sector. 84 However, unlike the loans from the 
China Ex-Im Bank and CIFL, this loan is not oil backed. 85 It is unclear whether the Chinese and Angolan 
officials met with 88 Queensway Group's leadership during these trips. 

While state-to-state relations between China and Angola appear to be strong, the status of the 88 Queensway 
Group's projects in Angola and its relationship with the Angolan government remain uncertain. On the one 
hand, the recent drop in oil prices and the global financial crisis have not deterred China's state-owned policy 
banks from promising further financing for projects in Angola. Additionally, dos Santos's meetings with Hu 
Jintao in December 2008 and with Chen Deming in January 2009 show continuity in high-level political 
exchanges. On the other hand, although the 88 Queensway Group has become increasingly active outside of 
Angola, it has not announced any new projects in Angola since 2007. However, several individuals 
interviewed by the authors of this report claimed that vehicles branded with CIFL's logo still can be seen 
driving around Luanda. 86 



24 



V. THE GLOBAL SCOPE OF THE 88 QUEENSWAY GROUP 



The 88 Queensway Group has taken several steps to expand and diversify its business portfolio to include 
new markets and sectors beyond Angola and its petroleum sector. In addition to purchasing a publicly traded 
company with activities in several new sectors, the 88 Queensway Group has used China Sonangol as a means 
to globali2e its investments. China Sonangol has created a "direct investments team" to spearhead 
investments in various areas, including real estate, basic materials, and consumer and industrial sectors. 87 
China Sonangol has become active in the air travel industry and has purchased nearly $1 billion in high-profile 
real estate in the United States. The Group also has created numerous other companies registered in Hong 
Kong (most of which are located at the 88 Queensway address) in order to spread its investments abroad. 
For a complete list of the 88 Queensway Group's global activities by country, please refer to Appendix B. 

China Sonangol 

After establishing the joint venture with Sonangol to gain a footing in the petroleum sector in Angola, the 88 
Queensway Group used China Sonangol to diversify its investments and expand globally. In Tan2ania, China 
Sonangol deals were met with controversy, and the Chinese Ministry of Foreign Affairs again did its best to 
distance itself from the Group. China Sonangol also was used as the platform for creating the Group's first 
publicly traded company and investing in the United States for the first time. According to media reports, 
China Sonangol recently has become active, or is in negotiations for projects, in Cote d'lvoire, Indonesia, and 
Singapore. 

Argentina 

On November 14, 2004, Chinese President Hu Jintao met with Argentine President Nestor Kirchner, 
pledging to invest $19.71 billion over the next decade. The letters of intent pledged $260 million in 
communications and satellite technology; $6 billion in housing and infrastructure; $5 billion in the energy 
sector; and $8 billion in urban and suburban railways. Media accounts also reported that during Hu's visit, Lo 
Fong Hung, Helder Bataglia, and Sampa met publicly with Kirchner in order to sign agreements between 
Chinese, Portuguese, and Argentine companies. Sampa was described as director of China Beiya Escom. xi . 
Lo was described as a representative of the China Construction Bureau, even though she is listed on China 



a As described in section II, China Beiya Escom is the joint venture between Bataglia's Portuguese company, Escom, 
and Beiya International Development Limited (now known as Dayuan International Development Limited). 



25 



Beiya Escom company filings as a director.™ Bataglia represented his company, Espirito Santo Financial 
Group. Also joining them at the meeting was Manuel Vicente, chairman of Sonangol. 88 

While most reports described the individuals affiliated with the 88 Queensway Group as accompanying 
President Hu's Chinese delegation, one Argentine newspaper asserted that the businessmen merely were 
posing as representatives of the Chinese government and had no affiliation with President Hu. In addition, 
prior to the conclusion of the deal between the 88 Queensway Group affiliates and former President 
Kirchner, PRC Foreign Minister Li Zhao Xing discouraged the agreement, saying that these companies do 
not represent the state of his country and did not ensure that the projects were viable. He stated, "They 
should bring [the projects] back to square one." 89 This type of denouncement by the PRC Foreign Mnistry is 
not unprecedented for the 88 Queensway Group, with the Foreign Ministry offering a similar rebuke against 
the Group's agreements in Angola. 

Tanzania 

The activities of the 88 Queensway Group also have raised controversy in Tanzania. In July 2008, China 
Sonangol became involved in Tanzania when high-level officials from the government of Tanzania, the China 
Development Bank, and China Sonangol signed an agreement to develop Tanzania's agriculture, 
transportation infrastructure, housing, mining, and power sectors. The agreement stipulated that China 
Sonangol would "develop the Julius Nyerere International Airport including the development of Terminal 
III" and would "initiate projects leading to [Sonangol taking] 49 [percent] of [Tanzanian] government shares 
of Air Tanzania Limited Company." 90 

With this deal, China Sonangol was granted oil exploration rights in exchange for purchasing shares in 
Tanzania's national airline. In February 2009, The East African reported that the state-owned Tanzanian 
Petroleum Development Corporation granted China Sonangol three licenses for oil exploration in Rukwa 
(western Tanzania) in order to induce the Hong Kong-based firm to purchase the shares in troubled Air 
Tanzania for $21 million. 91 According to local media, the money from the transaction was intended to help 
purchase two used Bombardier Dash 8 Q400 turboprop planes from the Canadian firm Bombardier 



™ This research has not found any other connections between Lo Fong Hung and the China Construction Bureau 
except for this article. The China Construction Bureau is a subsidiary of the China State Construction Engineering 
Corporation (CSCEC), an entirely state-owned company. However, China Construction Bureau possibly is a 
mistranslation for the China Construction Bank. While the China Construction Bank has not given loans recently, it was 
involved in giving loans to Angola in 2002. (Indira Campos and Alex Vines, "Angola and China: A Pragmatic 
Partnership" (working paper presented at a CSIS [Center for Strategic and International Studies] conference, "Prospects 
for Improving U.S.-China-Africa Cooperation," December 5, 2007). 



26 



Aerospace Inc. 92 According to The East African and several members of the Tan2anian parliament, this 
transaction violated the nation's procurement laws. 93 

The deal reportedly was finalized during Chinese President Hu Jintao's visit to Tanzania in early 2009 and is 
currendy under investigation by the Tanzanian government. In line with this investigation, Air Tanzania was 
asked to give a detailed account to parliament on what transpired during the signing of the agreement. 94 
Zitto Kabwe, chairman of the Parastatal Organisations Accounts Committee (POAC), xiii stated that the 
Tanzanian Parliament had not been made aware of the negotiations with China Sonangol and that 
"Parliament needs to know how oil exploration rights can be exchanged for an airline." 95 However, Yona 
Killagane, managing director of the Tanzania Petroleum Development Corporation, claimed that China 
Sonangol was offered the licenses in 2007 in a memorandum of understanding that "had no link whatsoever 
to the Air Tanzania share sale." 96 

Officials from the Chinese and Tanzanian governments have raised questions about the deal since it became 
publicly known and have distanced themselves from it. The First Secretary of Economic Affairs at the 
Chinese embassy in Tanzania, Mr. Xia Na, told the Tanzanian government in August 2008 that while the 
China Development Bank will finance some projects in the country, the embassy is not aware of any plans by 
China Sonangol to acquire equity stakes in Tanzania's airline. 97 In an apparent attempt to distance himself 
from the deal with China Sonangol, the managing director of the airline claimed that Air Tanzania officials 
were not involved in negotiations with China Sonangol at any point and that the deal violated "[Tanzanian] 
procurement laws, which requires an international tender be advertised for such serious investments." 98 It 
remains unclear whether this scandal will derail China Sonangol's activities in Tanzania. 



The 88 Queensway Group's Purchase of Aircraft 

China Sonangol's purchase of airplanes has not been limited to Tanzania. In addition to these purchases and 
the services agreement with Sonair in Angola, the 88 Queensway Group has purchased airplanes from 
France's Airbus and Brazil's Embraer. In February 2007, China Sonangol ordered three Airbus Corporate 
Jetliners and, in August 2007, purchased two Legacy 600 Executive Jets from Brazilian aircraft manufacturer 
Embraer. 99 These jets may have been purchased in order to facilitate the activities of China Sonangol and its 
executives. 



mi p aras tatal Organisations Accounts Committee is the Tanzanian Parliament's committee for the oversight of state- 
owned corporations. 



27 



Indonesia 



China Sonangol recently made its first public entry into Southeast Asia. On March 26, 2009, it was 
announced that China Sonangol International Holdings acquired a $200 million stake in the Cepu oil and gas 
field in the West Java province of Indonesia. 100 The block is believed to contain reserves of more than 250 
million barrels of oil. It is operated by Indonesia's national oil company, PT Pertamina and Exxon Mobil. 
Additional information on this deal exists in Bahasa Indonesia language news sources, although researchers 
were unable to utilize these sources. As this deal continues to develop, it warrants further examination. 

Singapore 

On April 17, 2009, it was announced that China Sonangol had purchased 9.1 percent of the shares of OKP 
Holdings Limited, a Singaporean construction and civil engineering firm. OKP describes itself as "a leading 
home-grown infrastructure and civil engineering company in the region, specializing in the construction of 
airport runways and taxiways, expressways, flyovers, vehicular bridges, urban and arterial roads, airport 
infrastructure and oil and gas related infrastructure for petrochemical plants and oil storage terminals." Mr. 
Or Toh Wat, group managing director of OKP, stated that the company's newly formed partnership with 
China Sonangol is a good opportunity "to tap on [China Sonangol' s] reach, relationships and expertise" while 
the OKP Holdings seeks to "extend [its] geographic footprint." 101 

Cote d'lvoire 

According to Jeune Afrique, Societe Nationale d'Operations Petrolieres de la Cote d'lvoire (Petroci), 

Cote d'lvoire's national oil company, is in discussions with China Sonangol and Sinopec over the 
development of several oil concessions and the construction of a petroleum refiner}' in Cote d'lvoire. 102 As 
this deal continues to develop, it warrants further examination. 

Artfield: the 88 Queensway Group's First Known Involvement in a Publicly Traded Company 

In 2008, the 88 Queensway Group purchased a controlling stake in Artfield Group Limited, a company 
engaged in the marketing and trading of clocks, office-related products, lighting products, and metals. 
Artfield was incorporated in Bermuda and sells the majority of its products to North America and Europe. 
However, Artfield also conducts business in Hong Kong and the PRC. 103 Artfield has offices in Hong Kong, 
Germany, and the United Kingdom and is listed on the Hong Kong, Munich, and Berlin Stock Exchanges 
and on the USA Pink Sheets. 104 



28 



In January 2008, Ascent Goal Investments Limited, a wholly owned subsidiary of China Sonangol 
International Limited, agreed to buy 56.7 percent of Artfield. 105 By March 2008, Ascent had acquired 74.42 
percent of Artfield's shares and had named three new executive directors to the company— Lo Fong Hung, 
Wang Xiangfei, and Kwan Man Fai. Lo Fong Hung has been named Artfield's chairperson and managing 
director. Because Artfield is a publicly listed company, once these three individuals became executive 
directors of the company, they were required to release publicly their biographical information to Artfield's 
shareholders. After the purchase of the shares and the change of leadership, Artfield changed its head office 
to Two Pacific Place, 88 Queensway, Hong Kong. Please see Figure 4 for the ownership structure of Artfield 
Group. 

According to Artfield's 2008 annual report, the reason for entering into its agreement with Ascent Goal was 
to "actively seek for investment opportunities in order to broaden and expand the business and operations of 
the Group, particularly in natural resources and/or PRC properties area." 106 The report also states, "The 
Company made its first step in opening the tremendous business opportunities in the oil industry by entering 
into a service agreement with China Sonangol International Limited, the holding company of Ascent Goal, 
whereby the Group agreed to provide, among others, certain marketing analysis, news clipping, preparation 
of sales report, invoicing and preparation of management accounts services on oil trading to China 
Sonangol." 107 By agreeing to help Artfield Group gain entry into the oil trading market, China Sonangol is 
able to utili2e the human resource and administrative capacity of Artfield. Since the purchase of shares by 
Ascent Goal, Artfield has ceased its trading of metals and lighting and currently is focusing solely on 
production and sales of clocks and other office-related products. In the time that the 88 Queensway Group 
has held the controlling shares of the company, Artfield Group Limited has had a gross loss of HK$249,000 
(approximately US $32,127), with total assets equaling HK$388,1 54,000 (approximately US $50,082,448.) 108 

On August 23, 2008, Mr. Lev Leviev, along with two of his companies, Africa Israel Financial Assets and 
Strategies Ltd and Memorand Management (1998) Limited, purchased nearly 10 percent of Artfield's shares. 
Leviev, a billionaire Israeli diamond magnate who made a large amount of his fortune trading diamonds in 
Africa, first interacted with the 88 Queensway Group in Angola. Leviev's history in the country stems from 
when he used high-level Angolan political contacts to undercut rivals (such as DeBeers) in the diamond 
market. Among his contacts are Isabel dos Santos, the Angolan president's daughter. 109 Leviev is also the 
director of Africa Israel Investments Limited, which has interests through its subsidiaries in diamonds, real 
estate, and chemicals. Africa Israel Investments Limited also has investments through Africa, Israel, Russia, 
and the United States. 110 



29 



According to an announcement by Artfield to the Hong Kong Stock Exchange, "Mr. Lev Leviev was not as 
at [sic] 27 August 2008 or is not as at [sic] the date of this announcement (a) a connected person (as defined 
under the Rules Governing the Listing of Securities on the Stock Exchange (the "Listing Rules")) of the 
Company or (b) connected with each other and/ or any of the connected persons of the Company according 
to the Listing Rules [of the Hong Kong Stock Exchange]." 111 However, only one week later one of Leviev's 
companies sold to a subsidiary of the 88 Queensway Group nearly $1 billion in Manhattan real estate. The 
Listing Rules state that when Leviev bought the 10 percent of Artfield, he could not enter into "any 
agreement, arrangement, understanding or undertaking, whether formal or informal and whether express or 
implied" with any of the directors of Artfield. If Leviev bought the 10 percent of Artfield while negotiating 
for the 88 Queensway Group to buy his real estate in Manhattan, he would have violated the Listing Rules of 
the Hong Kong Stock Exchange. 112 

On June 4, 2009, Artfield announced that it would change its name to "China Sonangol Resource Enterprise 
Limited." 

+ Ownership Structure of Artfield Group Limited in 2008 



Dayuan International 
Development 
Limited (formerly 
Beiya) 



Sociedad Nacional de 
Combustiveis de 
Angola (Sonangol) 



China Sonangol 

International 
Holdngs Limited 



Ascent Goal 
Investments 
Limited 



Africa Israel 
Financial Assets 
and Strategies 



Memorand 
Management 



Lev Leviev 




China Beiya 

Escom 
International 
Lrm ited 



30 



United States 



On August 31, 2008, one week after purchasing 10 percent of Artfield, Lev Leviev's Africa Israel 
International-USA (AFI-USA) signed a memorandum of understanding providing for the sale of its rights 
over several real estate properties in New York to China Sonangol. 1 13 xiv China Sonangol purchased the JP 
Morgan building located at 23 Wall Street directly across from the New York Stock Exchange for $150 
million. In addition, it paid $150 million for a 49.9 percent stake in the Clock Tower located at 5 Madison 
Avenue, and $50 million (in addition to taking on half the building's $720 million debt) for a 49 percent stake 
in the former New York Times Building located at 229 W 43 rd Street. 114 AFI-USA CEO Rotem Rosen 
signed the deed for the JP Morgan building in New York on September 29, 2008, and Kwan Man Fai, listed 
as vice-president of CS Wall Street LLC, signed the deed in Hong Kong on October 29, 2008. 115 Notably, 
the address of CS Wall Street LLC is the same as the address of Rotem Rosen's law office in Manhattan, 
Herzfeld & Rubin, P.C. Additionally, Rosen told Real Estate Weekly that "[China Sonangol] will act as our 
strategic partner for purchasing more real estate in the United States in the near future." 116 

Beyond China Sonangol: 88 Queensway Group Activities Abroad 

Venezuela 

In addition to China Sonangol's activities in Argentina, the 88 Queensway Group has expanded into at least 
one other Latin American country. In April 2004, a Venezuelan television station reported that President 
Hugo Chavez had signed a latter of intent with Portugal and China to proceed with investment projects 
amounting to $300 million in the energy, construction, communications, services, and aluminum sectors. 
Signing on behalf of Portugal was Helder Bataglia; on behalf of China was Lo Fong Hung, listed as a director 
of Beiya International Development. Following the signing of the letters, President Chavez announced that 
"The [Free Trade Area of the Americas between Venezuela and the United States] is dead. May the 
Washington government's plan to simply impose a model on us, rest in peace for the good. The signing of 
this agreement also gives a renewed boost to relations between China and Venezuela." 117 The following day 
both Bataglia and Lo appeared on "Alo Presidente!" Chavez's nationally syndicated television program, to 
discuss the investments. 118 No evidence confirms that the 88 Queensway Group proceeded with any 
investment projects in Venezuela. 

Republic of the Congo 

Xlv At that time, the buyer was identified as a "Far East investment fund."™ However, on November 20, 2008, Real 
Estate Weekly reported that China Sonangol was the previously unidentified "Far East investment fund." 



31 



The 88 Queensway Group appears to have employed a strategy in the Republic of the Congo similar to its 
strategy in Angola. On March 21, 2005, the 88 Queensway Group created a joint venture in the Republic of 
the Congo (Bra22aville) with its national oil company, Societe Nationale des Petroles du Congo (SNPC). The 
joint venture is called SNPC Asia. The directors include Lo Fong Hung and Veronica Fung, as well as top 
executives from SNPC. Notably, the Congolese government had signed two offshore exploration and 
production agreements with Sinopec for the Marine XII and High Sea C blocks on February 23, 2005 — only 
a few weeks earlier. 119 

In December 2006, Kensington International, an international consulting firm, filed a lawsuit in the High 
Court and the District Court of the Hong Kong Special Administrative Region of the PRC against the 
Republic of the Congo, SNPC, SNPC Asia, and others. The lawsuit alleged that the defendants laundered 
money to keep funds earned from oil revenues away from creditors. It further alleged that the defendants 
transported stolen oil in foreign commerce and sold those goods in the United States. The defendants — 
including the Congolese president's son and the SNPC Asia joint ventures — were required to pay nearly 
HKD 900,000 (approximately US$116,000) in fines to Kensington and several other international creditors. 120 



32 



V. CONCLUSIONS 

As mentioned in the introduction, in determining whether the 88 Queensway Group's investment practices 
are state directed and strategic, or commercially oriented and profit driven, several questions first must be 
answered. This paper is an attempt to answer such questions, and this section summari2es our findings to 
date. While entitled "Conclusions," this section also highlights additional questions raised by this research 
that will shed more light on the activities of the Group, its motivations, and its connections to the Chinese 
government. 

What is the extent of the relationship between the 88 Queensway Group and the Chinese 
government? 

The paucity of public information about the professional and personal backgrounds of the 88 Queensway 
Group's key personnel prior to 2003 prevents a solid conclusion about whether or not the group is an 
operation controlled by the Chinese government. Although the 88 Queensway Group is portrayed to the 
public (and accepted publicly) as a private, Hong Kong-based company with no government affiliation, some 
evidence does suggest that several of the group's personnel are connected to the Ministry of Public Security 
or the Ministry of State Security. However, these connections are tenuous and do not demonstrate concretely 
that the 88 Queensway Group is a construct of the Chinese government or a state-owned enterprise or that 
the group and its investment decisions are controlled by these actors. 

On several occasions, the 88 Queensway Group also has relied upon Chinese government resources and 
connections in order to gain access to target markets. For example, then-PRC Ambassador to Venezuela, Ju 
Yijie was present when Lo Fong Hung and Helder Bataglia appeared in April 2004 on Venezuelan President 
Hugo Chavez's television show "Alo Presidente!" Additionally, many of the 88 Queensway Group's meetings 
with high-level officials to sign oil concession and financing agreements occur during or very soon before or 
after visits by PRC official government representatives. For example, this occurred when Lo Fong Hung 
signed agreements with former Argentine President Nestor Kirchner only two days prior to an official state 
visit by Chinese President Hu Jintao in 2004. In addition, an agreement for the 88 Queensway Group to buy 
49 percent of Tanzanian Airlines was announced only days after an official state visit by President Hu Jintao 
to Tanzania in February 2009. 

It is worth noting that the mere fact of Chinese official participation in a meeting or the convenience of 
timing should not by itself be considered unusual or corrupt. In fact, it is common practice for heads of state 
and/ or ministerial level officials to lead trade missions to other countries in which they are accompanied by 



33 



private parties who want to do business in the country, and it is not uncommon for those same officials to 
both arrange and participate in meetings between the private parties and the other government in an effort to 
market the country's products and services. However, this does demonstrate that, at some level, Beijing is 
aware of, and does have a relationship with, the 88 Queensway Group — in contrast to what PRC government 
officials have claimed on several occasions. 

The Chinese Ministry of Foreign Affairs' (MFA) support for the 88 Queensway Group has been inconsistent, 
and recendy the MFA has taken steps in its public statements to distance itself from the activities and 
companies associated with the 88 Queensway Group. In sharp contrast to the support shown to the 88 
Queensway Group in Venezuela, when it was announced in late 2004 that companies owned by the 88 
Queensway Group were to invest $20 billion in Argentina, the PRC Foreign Minister discouraged the 
investments and said that the 88 Queensway Group companies involved "do not represent the Chinese 
government" and that he could not ensure the viability of the projects. These sentiments were later echoed by 
PRC Mnistry of Foreign Affairs' officials in Angola. It remains unclear what has motivated the MFA to 
make these statements to the media about the 88 Queensway Group's activities. Furthermore, the 
contradictory actions of the MFA raise several questions: 

1) Is the MFA attempting to obfuscate government linkages to the Group? 

2) Does the MFA see the 88 Queensway Group as a bureaucratic rival over foreign policy and 
investments? 

3) Is the MFA unaware of the true nature of the 88 Queensway Group and the extent of its global 
activities? 

Considering the fact that there is a paucity of information available about the personal and 
professional backgrounds of the 88 Queensway Group, how were its companies able to gain access 
to high levels of foreign governments and entry into foreign markets? 

In addition to using government resources and connections, the 88 Queensway Group seeks access to high- 
level officials in countries in which it wishes to invest. This research found that in the majority of the 
countries in which the Group is active, it has established and cultivated relationships with foreign 
entrepreneurs, businesspeople, or consultants who are already well established in the target sector or market. 
The Group's relationship with Escom CEO Helder Bataglia provided access to Venezuelan President Hugo 
Chavez and then-Argentine President Nestor Kirchner. Ties to Lev Leviev enabled the Group to purchase 
nearly $1 billion worth of real estate in Manhattan. Additionally, the 88 Queensway Group's subsidiary, China 
Sonangol, is a client of Pierre Falcone-owned Pierson Asia, a consulting firm that specializes in advising 



34 



Chinese firms doing business in Angola. 121 It is worthwhile to note that Leviev, Bataglia, and Falcone each 
have extensive connections to the Angolan government and the country's extractive sector. 122 

The 88 Queensway Group has employed a variety of methods for gaining access to contracts, real estate 
assets, and natural resources. In the Republic of the Congo and Angola, the 88 Queensway Group established 
joint ventures with the target country's national oil company. In Angola, Argentina, and Tanzania, the Group 
brokered deals that involved undertaking massive infrastructure construction projects and projects in 
petroleum exploration and production. This raises the following questions: 

1) Does the 88 Queensway Group prioritize either access to infrastructure sector contracts or access to 
natural resources? 

2) Is the 88 Queensway Group engaging in projects in the infrastructure sector merely to gain access to 
petroleum reserves in the target country? 



How was the 88 Queensway Group able to raise the billions of dollars in capital needed to undertake 
its energy, financing, infrastructure, and real estate projects around the world? 

Official company documents from the Hong Kong Companies Registry demonstrate that the 88 Queensway 
Group's subsidiaries involved in Angola were able to obtain loans from several different banks, including 
Bank of China Limited (branch in Hong Kong); Calyon (a French bank); and Wing Hang Bank, Limited 
(based in Hong Kong). Evidence shows that Sinopec helped to facilitate the oil-backed loan syndicated by 
Calyon by acting as a guarantor. However, more research is needed in order to determine how the Group was 
able to obtain billions of dollars in financing upon its inception in 2003, considering the lack of public 
information about 88 Queensway Group personnel and their business reputations. 

To what extent, if any, are the activities of the 88 Queensway Group and Sinopec coordinated? 

Several of the 88 Queensway Group's key personnel hold positions in Sinopec operations. Lo Fong Hung is 
director and Wang Xiangfei is vice-chief financial officer of Sonangol Sinopec International, a joint venture 
between Sinopec and China Sonangol, a joint venture between Sonangol and the 88 Queensway Group. 
Additionally, Wu Yang was an independent executive director for Beijing Yanhua Up-Dated High-Tech Co., 
Ltd, a Sinopec subsidiary based in Beijing. 



35 



The timing of the 88 Queensway Group's and Sinopec's respective entries into the Republic of the Congo 
and Cote d'lvoire suggests that their activities in that country may have been coordinated. The 88 
Queensway Group and Sonangol formed China Sonangol shortly after Sonangol Chairman Manuel Vicente's 
August 2004 visit to China, during which it was announced that Sinopec was pursuing block 1 8. On February 
23, 2005, Sinopec and the Congolese government signed two offshore oil exploration and production 
agreements, one month before the 88 Queensway Group and the Congolese national oil company established 
SNPC Asia. 

The 88 Queensway Group formed a joint venture with Sinopec for petroleum exploration and production. 
Sinopec also acts as the guarantor for one of the oil-backed loans taken out by the 88 Queensway Group for 
projects in Angola, and Unipec, Sinopec's oil-trading arm, is the principal off- taker for the oil supply contract 
linked to the same lending agreement. Additionally, Sinopec's withdrawal from participating in the 
construction of a refiner}' with Sonangol and its relinquishing of oil blocks corresponded with numerous 
problems encountered by the 88 Queensway Group in Angola. 

Despite these connections, the extent, nature, and status of the 88 Queensway Group's relationship with 
Sinopec remain unclear. These connections neither prove that the Group is controlled by Sinopec nor that 
the two entities share an agenda in the countries in which both companies are involved. Questions that 
remain include the following: 

1) What motivates the cooperation between the 88 Queensway Group and Sinopec? 

2) What role did the Group play in assisting Sinopec in acquiring a stake in oil block 1 8 in Angola? 

3) Did the Group need a relationship with Sinopec to gain access to the Chinese oil market? 

4) Aside from acting as guarantor on the loan from Calyon, what role did Sinopec play in facilitating the 
Group's access to financing? 

What is the global extent of the 88 Queensway Group's activities? 

Research has found that the 88 Queensway Group is involved in projects in automobile manufacturing; 
cement production; diamond mining; financing; infrastructure construction; real estate; and petroleum 
exploration, production, and trading. Additionally, the 88 Queensway Group has been involved in projects or 
negotiations in at least fourteen countries (see Appendix B). The 88 Queensway Group's opacity makes it 
difficult to assess the global extent of its activities and connections. For example, there are numerous 88 
Queensway Group subsidiaries listed on Hong Kong company documents that have not been mentioned in 
any publicly available media source. Job advertisements for China Sonangol have noted that the company is 



36 



active in North Korea and Russia; the exact details of these projects are unknown. Future research is needed 
to map the current extent and continued expansion of the 88 Queensway Group's global activities. 

The 88 Queensway Group continues to expand into new countries and sectors. During the past year, the 88 
Queensway Group's subsidiaries have purchased a publicly listed company, shares in an airline, high-profile 
real estate in Manhattan, and stakes in an Indonesian petroleum field and a Singaporean construction 
company. It has engaged in infrastructure projects in Tanzania and Mozambique. The changes in the 88 
Queensway Group's investment behavior raise two important questions: 

1) What is driving the Group's expansion into new sectors and markets? 

2) Does this signal a long-term diversification shift away from the energy sector and out of Angola? 

What is the significance of the 88 Queensway Group's activities in the context of China's "going 
out" strategy? 

The case of the 88 Queensway Group demonstrates that there is a diverse set of actors involved in China's 
"going out" strategy. For example, in Angola, Chinese government agencies, state-owned enterprises, and 
private investors are active in Angola's energy and infrastructure sectors. Angola has received delegations 
from various Chinese government agencies, loans from three Chinese policy banks, and investment from 
numerous Chinese state-owned companies. On top of this, the 88 Queensway Group has created a financing 
structure for projects in Angola's construction sector that is comparable to, but separate from, the China Ex- 
Im Bank credit lines. Furthermore, the Chinese Ministry of Foreign Affairs' statements about the 88 
Queensway Group's subsidiaries illustrate how the different actors involved in China's "going out" strategy 
oftentimes may have conflicting or competing agendas. 

The case of the 88 Queensway Group provides important lessons for how scholars should approach the 
study of China's diplomatic and economic relationships. Often, analysts view China as a monolithic actor, 
with one strategy applying to all facets of its international relationships. However, the case of the 88 
Queensway Group demonstrates that Chinese investments and relationships are far more complex, involving 
different ministries, state-owned enterprises, and individual actors. Rather than solely focusing on the Chinese 
government and its official pronouncements and delegations, researchers must peel back the layers; view the 
individuals and companies that make up these activities and investments, and work to understand how their 
incentives for involvement coincide or conflict with central government objectives. 

What are the implications of the 88 Queensway Group's activities for the United States? 



37 



The 88 Queensway Group has illustrated how foreign firms are able to mask their acquisitions of U.S. -based 
assets. The group's recent purchase of nearly $1 billion in real estate in Manhattan went relatively unnoticed 
in the United States, with only real estate publications publishing the details of the transaction. While it is 
unclear why the 88 Queensway Group made this purchase, it is clear that it has been able to enter the U.S. 
market with relatively little public investigation. The 88 Queensway Group's purchase of high-profile real 
estate assets in the United States underscores the importance of identifying the extent of the group's 
connections to the Chinese intelligence community, the public security apparatus, and/or state-owned 
enterprises. 

The lack of transparency and public accountability surrounding the 88 Queensway Group is a major concern 
for the United States. By posing as a private firm, the Group creates numerous companies within a 
complicated organi2ational structure to invest globally, thereby enabling the Group to acquire assets 
unnoticed. Because the 88 Queensway Group is presenting itself as a private entity based in Hong Kong, it is 
unclear whether its companies would receive the same scrutiny from regulatory institutions and the U.S. 
media that a Chinese state-owned company would receive. Additionally, the 88 Queensway Group's lack of 
transparency creates difficulty in distinguishing between Chinese state and nonstate actors. This ambiguity 
may hinder effective analysis of China's bilateral relationships with other nations, as well as the scope and 
impact of Chinese aid and investment. 

If U.S. efforts to promote development and democratization in Africa and Latin America are to advance, it is 
essential that the United States understand the complete scope of Chinese investments in Africa and who is 
controlling these investments. In order to fully comprehend the extent and character of Chinese investments 
abroad, analysts must be able to look beyond the investments made by public entities and understand who is 
controlling the actions being taken by nominal private investors as well. 



1 See: Indira Campos and Alex Vines, "Angola and China: A Pragmatic Partnership" (working paper presented at a CSIS 
conference, "Prospects for Improving U.S. -China-Africa Cooperation," December 5, 2007). 

2 Agence France Presse "China to Invest 20 Billion Dollars in Argentina," November 17, 2004. 

See also "Brazil Embraer Gets Two Legacy 600 Jets Order from China Sonangol," Latin America News Digest, August 3, 
2007; Lucy Corkin "China's Interest and Activity in Angola's Construction and Infrastructure Sectors," Centre for Chinese 
Studies (2006); and Manuel Ennes Ferreira, "China in Angola: Just a Passion for Oil?" China Returns to Africa: A Continent 
and a Superpower 'Embrace (2008); See also "Zhongguo Guoji Jijin Gongsi Xu Jinghua Lo Fong Hung Xianggang Beiya 
Gongsi he Angela Chengli 'Anzhong Shiyou Kongzhi Guyou Xian Gongsi" ("China International Fund Limited Xu 
Jinghua, Lo Fong Hung Hong Kong Beiya International and Angola create 'China Sonangol International Holdings 
Lmited Company"), Sunrise Financing Message Board, March 27, 2007. 
<http:/ / www.sunrisefinancing.com/bbs/ viewthread.php?tid=1471 > 

3 China OTIC Bank Corp Ltd (Shanghai Stock Exchange: Wang Xiangfei brief biography), Reuters Business and Finance, 
February 24, 2009. <http://www.reuters.com/finance/stocks/officerProfile?symbol=601998.SS&officerId=947622> 



38 



4 Information from this source has not been corroborated. Howard O. DeVore, China's Intelligence and Internal Security 
Forces (Jane's Information Group, October 1999), p. 43. 

5 U.S. -China Economic and Security Review Commission, 2008 Annual Report to Congress, p. 56. 

6 Artfield Group Ltd (Hong Kong Stock Exchange: Lo Fong Hung brief biography), Reuters Business and Finance, 
February 25, 2009. <http://www.reuters.com/finance/stocks/officerProfile?symbol=1229.BE&officerId=1134991> 

7 "Shi Zhende Ma?" ("Is This Real?") April 9, 2007. Xin Lang Wang 

<http:/ /bbs.uc.sina.com.cn/treeforum/App/view.php?tbid=6629&bbsid=62&subid=0&fid=276984&id=null> 

8 Artfield Group Ltd (Hong Kong Stock Exchange: Kwan Man Fai brief biography), Reuters Business and Finance, February 
25,2009. < http://www.reuters.com/ finance/ stocks/officerProfile?symbol=1229.HK&officerId=1134994> 

9 "Kwan Man Fai: Brief Biography - Artfield Group Limited (Berlin Stock Exchange): 1229.BE," Reuters Business and 
Finance. < http:/ / www.reuters.com/ finance/ stocks/ officerProfile?symbol=1229.BE&officerId=l 134994 > 

10 Tan Po, "Spy Headquarters Behind the Shrubs - Supplement to 'Secrets about CPC Spies' " (Hong Kong), March 1, 
1 997, No. 23333, pp.34-37. Cheng Ming on Spy Headquarters FBIS-CHI-97-047 

11 Republic of Angola Permanent Mission to the United Nations Newsletter, "Agreement signed on building new 
refinery," March 2006. <www2.un.int/Countries/Angola/l 14481 7047.pdf>; Zhongguo shi you hua gong ji tuan gong si 
nian jian. (China Petrochemical Corporation Annual Report) 2001-2005. 

12 USCC Staff Translation. "Beijing Yanhua Gao Xin Ji Xu Gu Fen You Xian Gong Si di wu jie dong shi hui, di si ci hui 
yi jue yi gong gao," ("Beijing Yanhua Up-Dated High-Tech Co., Ltd., Fifth Director Meeting, Fourth Resolution,"), 
Zhongguo ZhengQuan Wang - Shanghai ZhengQuan Bao (China Securities Net - Shanghai Securities News), March 1 7, 2006. 
<http://finance.sina.com.en/stock/t/20060317/0252600521.shtml> 

See also: Beijing Yanhua Up-Dated High-Tech Co., Ltd., Annual Report 2005. 
<http://disclosure.szse.en/m/finalpage/2006-03-17/16576411.PDF> 

13 "Interview with Helder Bataglia," Press Net - Angola, September 6, 2004. <http://www.pressnet- 
dc.com/ angola/intescom.asp> 

14 Africa - Asia Confidential, "Big Oil, High Stakes," Volume 1, Number 1 (November 2007):. 2. 

15 "Joint Angolan, Russian, Portuguese Diamond Exploration To Create 1,500 Jobs," Fusophone Africa - FBIS Report in 
Portuguese, November 25, 2005. OSC ID: AFP20051124503002. 

16 "Interview with Helder Bataglia: Understanding the Market," Africa-lnvestor.com, September 1, 2008. 
<http:/ / www.africa-investor.com/ article.asp?id=3672> 

17 Alex Vines et al., "ANGOLA — Drivers of change: an overview" (London: Chatham House, 2005), pp. 5-7. 

18 Nicholas Shaxson et al. "Drivers of Change, Angola: Final Report," January 2008, p. 4. RM: Is this the correct first 
name? 

19 Alex Vines et al. "ANGOLA — Drivers of change: an overview," Chatham House, 2005, p. 9. 

20 U.S. Department of State "Background Note: Angola," January 2009. 

21 International Petroleum Finance, "Angola Uses Sonangol to Diversify, Invest Overseas," October 9, 2008. 

22 Nicholas Shaxson et al. "Angola Drivers of Change: Final Report," January 2008, p. 28. 

23 Africa Research Bulletin: Economic, Financial and Technical Series "Angola: Sonangol's Acquisitions," June 5, 2008. 

24 Nicholas Shaxson et al. "Angola Drivers of Change: Final Report," January 2008, p. 34. 

25 Indira Campos and Alex Vines, "Angola and China: A Pragmatic Partnership" (working paper presented at a CSIS 
conference, "Prospects for Improving U.S. -China-Africa Cooperation," December 5, 2007)., p. 6. 

26 Reuters, "Angola close to signing $1 bin Chinese loan -source," February 5, 2009. 

27 Indira Campos and Alex Vines "Angola and China: A Pragmatic Partnership," (working paper presented at a CSIS 
conference, "Prospects for Improving U.S. -China-Africa Cooperation," December 5, 2007). 

28 Lucy Corkin, "China's Interest and Activity in Angola's Construction and Infrastructure Sectors," Centre for Chinese 
Studies, 2006, p. 8. 

29 MacauHub, "Chinese companies in Africa have government 'seal of quality', says Chinese consultant," February 27, 
2006. 

30 Lucy Corkin, "China's Interest and Activity in Angola's Construction and Infrastructure Sectors," Centre for Chinese 
Studies, 2006, p. 8 

31 Africa Asia Confidential, "No oil guarantees," Volume 1, Number 7 (May 1, 2008). 

32 China View, "China, Angola discuss China's new credit line of over $1 bin," March 13, 2009. 

33 China View, "China, Angola discuss China's new credit line of over $1 bin," March 13, 2009. 

34 Africa- Asia Confidential, "Big oil, high stakes," Volume 1, Number 1 (November 2, 2007): 2; See also: Indira Campos 
and Alex Vines, "Angola and China: A Pragmatic Partnership," (working paper presented at a CSIS conference, 
"Prospects for Improving U.S. -China-Africa Cooperation," December 5, 2007).; See also: Indira Campos, "Fuelling 
Friendship," The World Today, June 2008. 



39 



35 Africa Asia Confirential, "Big oil, high stakes," Volume 1, Number 1 (November 2, 2007):.2. 

36 Indira Campos and Alex Vines, "Angola and China; A Pragmatic Partnership," (working paper presented at a CSIS 
conference, "Prospects for Improving U.S. -China-Africa Cooperation," December 5, 2007),, p. 11. 

37 Indira Campos and Alex Vines, "Angola and China; A Pragmatic Partnership," (working paper presented at a CSIS 
conference, "Prospects for Improving U.S.-China-Africa Cooperation," December 5, 2007).,, p. 11. 

38 Manuel Ennes Ferreira, "China in Angola: Just a Passion for Oil?" China Returns to Africa: A Rising Vomer and a Continent 
Fmprace, (New York, NY: Columbia University Press, July 2008), p. 313. See also: Seminario Angolense ,"PR tira da carola 
um Gabinete de Reonstrucao National,", October 2004. 

39 Africa-Asia Confidential, "Big oil, high stakes," Volume 1, Number 1 (November 2, 2007): 2. 

40 William Tonet, "It is necessary to change the way the country is governed," Folha 8, June 24, 2006— July 1, 2006, pp 2- 
4. 

41 Africa Asia Confidential, "Big oil, high stakes," Volume 1, Number 1 (November 2, 20070: 2; See also: "Ningde Lu 
Qiao: Zhongji Xu Jinghua Shen Tong Angela" ("Ningde Road and Bridge: CIFL's Xu Jinghua Mysterious Angola"), 
China Securities Journal, March 28, 2007. <http://www.cs.com.cn/xwzx/02/200703/t20070328_1074202.htm>; See also: 
Zhou Jiangong, "Africa frenzy feeds China stock bubble," Asia Times Online, March 27, 2007. 
<http://www.atimes.com/atimes/China_Business/IC27Cb01.html> 

42 "Zhongguo guoji jijin gongsi Xu Jinghua Luo Fanghong: Xianggang Beiya Gongsi he Angela chengli 'anzhong shiyou 
konggu youxian gongsi," ("China International Fund Limited Xu Jinghua Lo Fong Hung Hong Kong Beiya 
International and Angola create 'China Sonangol International Holdings Limited Company' "), Sunrise Financing Message 
Board, March 27, 2007. <http://www.sunrisefinancing.com/bbs/viewthread.php?tid=1471> 

43 "Zheng Wenxue hui jian Jingruit Gongsi keren yi xing jiaotan yu Gui qi hezuo shiyi," ("Zhang Wenxue meets with 
China Beiya Escom guests and discusses Guangxi cooperative relationship," Guangxi Daily News, July 14, 2005. 
<http:/ / www.gxdy.gov.cn/ news/ shownes.asp?nesid=2608> 

44 USCC Staff Translation. Mariano Obarrio, "De aquel 'megaanuncio' quedo muy poco" ("From the mega- 
announcement comes very little"), La Nacion, June 1, 2005. <http:/ /www.lanacion.com.ar/nota.asp?nota_id=709097> 

45 Zhou Jiangong, "Africa frenzy feeds China stock bubble," Asia Times Online, March 27, 2007. 
<http:/ / www.atimes.com/ atimes/China_Business/IC27Cb01.html> 

46 Lu Buping, "Zhongguo Dalu: Zhongguo Guoji Jijin Gongsi zai Angela bu zhi xiang gan shenme" ("Mainland China: 
Do Not Know what China International Fund Limited would like to do in Angola"), Africa Windows Message Board, 
January 18, 2007. <http:/ / www.africawindows.net/html/ feizhouzixun/ feizhouxinwen/ 20070704/ 1681 .shtml> 

47 "Zhongji Gongsi Zhu Angela Zongzhihui Ju Lizhao: 'Women bu shi da pianzi,'" ("CIFL Chairman Stationed in 
Angola, Ju Lizhao: 'We're not liars'"), Di Yi Caijing Ri Bao (Number One Finance Daily), April 2, 2007. 
<http://www.p5w.net/stock/news/gsxw/200704/t864743.htm > 

48 "Haijun Beihai Jiandui" (North Sea Naval Fleet), Qingdao ShiXinxi Wang (Qingdao City Information Web). 
< http://qpinet.qingdao.gov.cn/nianjianku.nsf/508e424127192d7b482566c9000b4473/0a6dd9f387b7046248256de2000 
3a3e2?OpenDocument > ; "PLA General Staff Department," Sino Defence.com, August 24, 2008, p.2 

<http:/ / www.sinodefence.com/ overview/ organisation/ gsd.asp> 

49 "Zui xin zonghe fenxi 600477, yong you jiu shi facai bu kan hou yi" ("Latest combined analysis of 600477, Possession 
is riches, have no regrets"), Hexun Web Blog, July 10, 2007, <http://guba.hexun.com/ 600477,guba,512985.html>; See 
also: "Hai jun Bei Hai jian dui" ("North Sea Naval Fleet"), The Standing Committee of Qingdao Municipal People's Congress 
Website<http://rdcwh.qingdao.gov.cn/nianjianku.nsf/9c873c7el238cd3648256aa70010353e/0a6dd9f387b 7046248256 
de20003a3e2?OpenDocument> 

50 Box 2 References: Africa-Asia Confidential, "Big oil, high stakes," Volume 1, Number 1 (November 2, 2007:. 2.; 
China International Fund Limited Web site <www.chinainternationalfund.com>; China Knowledge Newswire "OTIC 
starts construction of Angola housing project," September 3, 2008. 

51 Indira Campos and Alex Vines, "Angola and China: A Pragmatic Partnership," (working paper presented at a CSIS 
conference, "Prospects for Improving U.S.-China-Africa Cooperation," December 5, 2007).. 

52 Zhou Jiangong, "Africa frenzy feeds China stock bubble," Asia Times Online, March 27, 2007. 
<http:/ / www.atimes.com/ atimes/ China_Business/IC27Cb01.html> 

53 "Endiama, Mracel and Endiama-China project approved," Diamond Intelligence Briefs, Vol. 20, No. 447 (September 27, 
2005): 3666(1). 

54 Africa Energy Intelligence, "India and China Fight Over Africa's Oil," September 8, 2004. 

55 Africa Energy Intelligence, "India and China Fight Over Africa's Oil," September 8, 2004. 

56 Africa Energy Intelligence, "A Controversial Figure Pops Up in Beijing," June 18, 2008. 

57 Angela Charlton and Pierre -Antoine Souchard, "High-Profile Suspects in Angola Arms Trial in Paris," Washington Post, 
October 7, 2008. <http://www.washingtonpost.com/wp-dyn/content/article/2008/10/06/AR2008100602910.html> 



40 



58 "Angola-gate," The Economist, November 19, 2008. 

59 Africa Energy Intelligence, "Rosa Gets Go Ahead At Last," August 25, 2004. 

60 Mario de Paiva and Antony Sguazzin, "Angola grants deal to Sinopec," International Herald Tribune, March 21, 2006. 

61 Energy Compass, "Africa: Chinese Tricks," November 18, 2005. 

62 Republic of Angola Permanent Mission to the United Nations Newsletter "Agreement signed on building new 
refinery," March 2006; Alberto Cafussa "Pais vai poupar USD 500 milhoes," Jornal de Angola,QA2xc\\ 17, 2006). 

63 "Highlights: Angolan Independent Press Weekly Digest 16-29 Jul 06" AFP20060805501002^4«^/a - OSC Report in 
Portuguese, July 16, 2006 - July 29, 2006; See also: The East African, "Chinese Firm Likely to Buy 49 Percent Shares of 
Air Tanzania," August 16, 2008. 

64 Macau News, "China Sonangol and CIF sponsored Angolan driver Luis Sa Silva to race in Europe and Asia," April 23, 
2009. 

65 "Sino- Angola Partnerships in Oil and Gas is Collapsing," African Oil and Gas Journal (Match 24, 2007). 

66 Indira Campos and Alex Vines, "Angola and China: A Pragmatic Partnership," (working paper presented at a CSIS 
conference, "Prospects for Improving U.S. -China-Africa Cooperation," December 5, 2007), p. 17. 

67 Christopher Burke, Lucy Corkin, and Nastasya Tay, "China's Engagement of Africa: Preliminary Scoping of African 
case studies — Angola, Ethiopia, Gabon, Uganda, South Africa, Zambia," Centre for Chinese Studies (November 2007). 

68 Bloomberg News, "KBR to build refinery in Angola," December 5, 2008. 

69 Africa Mining Intelligence, "Government Cancels Pact with China," March 7, 2007. 

70 Information on China Endiama International Holdings Ltd was obtained through official company documents 
retrieved through the Hong Kong Companies Registry. 

71 Elaine Kurtenbach, "Chinese construction company defends handling of contract for Angolan project," Associated 
Press Worldstream, March 26, 2007. 

72 Zhou Jiangong, "Africa Frenzy feeds China stock bubble," Asia Times, March 7, 2007. 

73 Xinhuanet, "3 Chinese jailed for insider trading, fined $11.2 mln," China Economic Net, February 7, 2008. 

74 Indira Campos and Alex Vines "Angola and China: A Pragmatic Partnership," (working paper presented at a CSIS 
conference, "Prospects for Improving U.S.-China-Africa Cooperation," December 5, 2007), pp. 25-26. 

75 USCC Staff Translation. Zong Xinjian and Lu Yuan, "Dan Yinmu shou du kai kou; Zhongguo zhu an shi guan bu liao 
jie Zhong ji bei jing" ("Dan Yinmu speaks for the first time; Chinese embassy in Angola is not familiar with CIFL 
background") First Finance Daily Newspaper, March 29, 2007 [translated from Chinese]. 
<http://finance.sina.com.en/g/20070329/02383450690.shtml> 

76 USCC Staff Translation. Zong Xinjian and Lu Yuan "Dan Yinmu shou du kai kou; Zhongguo zhu an shi guan bu liao 
jie Zhong ji bei jing" ("Dan Yinmu speaks for the first time; Chinese embassy in Angola is not familiar with CIFL 
background.") First Finance Daily Newspaper, March 29, 2007. [translated from Chinese] 
<http://finance.sina.com.en/g/20070329/02383450690.shtml> 

77 Information about this case was obtained from the verified complaint filed by Sea Success Maritime Inc. against CIFL 
on June 1,2009. 

78 Alex Vines, interview with Commission staff, May 20, 2009. 

79 Xinhua, "Angolan President's Visit to China Boosts Cooperation Ties," December 19, 2008. 

80 MacauHub, "Angola/China: Funding from Beijing ensures continuation of Angolan reconstruction," December 23, 
2008. <http:/ / www.macauhub.com.mo/ en/ news.php?ID=6625> 

81 MacauHub, "Angola/ China: Funding from Beijing ensures continuation of Angolan reconstruction," December 23, 
2008. <http:/ / www.macauhub.com.mo/ en/ news.php?ID=6625> 

82 Xinhua, "China Promises to Help Angola to Revive Agriculture," January 18, 2009. 

83 People's Daily Online, "Angola becomes China's largest African trade partner," January 20, 2009. 

84 People's Daily Online, "China, Angola discuss China's new credit line of over $1 bin," March 13, 2009. 
<http://engHsh.people.com.cn/90001/90776/90883/6613124.html> 

85 Africa Asia Confidential,"No Oil Guarantees,", May 2008. 

86 Alex Vines, interview with Commission staff, May 20, 2009. 

87 This information was obtained through a job advertisement posted on www.haoqiantu. cn . 

88 Agence France Presse, "China to invest 20 billion in Argentina," November 14, 2004. 

89 USCC Staff Translation. Mariano Obarrio, "De aquel 'megaanuncio' quedo muy poco," EaNacion t June 1, 2005. 
<http:/ / www.lanacion.com.ar/ nota.asp?nota_id=709097> 

90 The East African, "Chinese firm to acquire a 49 percent stake in Air Tanzania," August 16, 2008. 

91 Wilfred Edwin, '"Chinese firm 'gifted' oil licenses," The East African, January 30, 2009. 

92 Eric Watkins, "Hu Eyes African Oil," Oil <& Gas Journal, February 16, 2009. 



41 



93 Wilfred Edwin, '"Chinese firm 'gifted' oil licenses," The East African, January 30, 2009; Sunday Observer, "ATCL-Chinese 
deal raises grave queries," February 15, 2009. 

94 Wilfred Edwin, '"Chinese firm 'gifted' oil licenses," The East Africna, January 30, 2009. 

95 Wilfred Edwin, '"Chinese firm 'gifted' oil licenses," The East African, January 30, 2009. 
96 Wilfred Edwin, '"Chinese firm 'gifted' oil licenses," The East African, January 30, 2009. 

97 The East African, "Chinese firm to acquire a 49 percent stake in Air Tanzania," August 16, 2008. 

98 Wilfred Edwin, '"Chinese firm 'gifted' oil licenses," The East African, January 30, 2009. 

99 AvioNews, "China Sonangol ordered two Legacy 600 executive jets," August 2, 2007; Reuters, "China Sonangol 
bought 3 jets, Airbus says," February 5, 2007. 

100 Asia Legal Business, "China Sonangol International - Indonesian CEPU project interest acquisition - US$200.00 m," 
March 26, 2009. <http:/ / asia.legalbusinessonline.com/ deals/ china-sonangol-international-indonesian-cepu-project- 
interest-acquisition/1662>; See also: Jakarta Post , "Indonesia: Massive New Oil Block Produces First Oil," December 
11,2008. 

101 OKP Holdings Limited, "OKP Teams Up With Strategic Business Partner Who Takes On Substantial Stake," April 
17, 2009. 

102 Pascal Airault, "La Cote d'lvoire se rapproche de la Chine," Jeune Afrique, June 12, 2009. 

103 Artfield Group Limited, 2008 Annual Report, Stock Code: 1229, July 28, 2008. 
<http://www.hkexnews.hk/listedco/listconews/sehk/20080730/LTN20080730684_C.pdf> 

104 Artfield Group Limited Web site: <http://www.artfield.com.hk> 
See also: "Artfield Group Limited," Reuters Company Search. 

<http:/ /www.reuters.com/ finance/ stocks/ stocks?searchType=name&search=Artfield%20Group%20Ltd> 

105 Xinhua Financial News Network, "Hong Kong-listed Artfield Group to raise 280 mln hkd via shares and bonds 
sale," January 29, 2008. 

106 Artfield Group Limited, 2008 Annual Report, Stock Code: 1229, July 28, 2008. 
<http://www.hkexnews.hk/listedco/listconews/sehk/20080730/LTN20080730684_C.pdf> 

107 Artfield Group Limited, 2008 Annual Report, Stock Code: 1229, July 28, 2008. 
<http://www.hkexnews.hk/listedco/listconews/sehk/20080730/LTN20080730684_C.pdf> 
los Artfield Group Limited, Interim Report 2008, September 2008. 

<http://www.hkexnews.hk/listedco/Ustconews/sehk/20081223/LTN20081223226.pdf> 

109 "OSC Report Highlights Angolan President's Oldest Daughter's Influence," OSC Feature - Angola - OSC Report, 
October 17, 2006. OSC ID: FEA20061018028807. 

110 Africa Israel Investments Limited Web site <www.africa-israel.com> 

111 Artfield Group Limited: High Concentration of Shareholding Announcement, September 23, 2008. 
<http://www.hkexnews.hk/listedco/listconews/sehk/20080923/LTN20080923435.pdf> 

112 Rule 14A.11 of the Hong Kong Stock Exchange "Listing Rules." 
<http: / / www.hkex.com.hk/ rule / listrules / Chapter_l 4A.pdf > 

113 Linda Barr OFlanagan, "Africa Israel sells stake in its Manhattan real estate holdings" Real Estate Weekly, November 
20,2008. 

114 Reuters, "Africa Israel agrees to sell New York property stakes," Reuters UK, August 31, 2008; Linda Barr O'Flanagan, 
"Africa Israel sells stake in its Manhattan real estate holdings," Real Estate Weekly, November 20, 2008. 

115 NYC Department of Finance, Office of the City Register, Document ID: 2008111800527001, Document Date: 
November 14, 2008, Preparation Date: November 18, 2008. 

116 Linda Barr OFlanagan, "Africa Israel sells stake in its Manhattan real estate holdings" Real Estate Weekly, November 
20, 2008. 

117 Venezuelan Presidential Press, "President Chavez: The FTAA Has Died for the Good of Our People," April 3, 2004. 

118 Transcript of "Alo Presidente!" from April 4, 2008. 

119 Mbendi Information Services, "Congo - Oil and Gas: Crude Petroleum and Natural Gas Extraction," An Mbendi 
Profile (no date). 

120 Target News Papers, "Golden Hammer Awards: List of the highest-value cases, filed in the High Court and the 
District Court of the Hong Kong Special Administrative Region of the People's Republic of China for the month of 
December 2006," Volume 8, Number 18 (January 27, 2007). 

121 Africa Energy Intelligence, "A Controversial Figure Pops Up in Beijing," June 18, 2008; Africa Energy Intelligence, "Is 
Sonangol Africa's First Sovereign Wealth Fund?" November 26, 2008. 

122 Africa J^ ne rgy Intelligence, "A Controversial Figure Pops Up in Beijing," June 18, 2008; Henrique Almeida and Sergio 
Goncalves, "INTERVIEW-UPDATE 1-Escom to bolster Angola diamond output," Reuters, October 16, 2008. 



42 



Appendix A: 88 Queensway Group Companies 



AC Jet International Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Lo Fong Hung 100% 
Directorship: Lo Fong Hung 
Description: Unknown 

Acegain Investments Limited (Dissolved) 

Address: Room 504, Block 7, Heng Fa Chuen, Chai Wan, Hong Kong 
Ownership: Veronica Fung 50%, Ghiu Ka Leung (Sam King) 50% 
Directorship: Veronica Fung, Ghui Ka Leung (Sam King) 
Description: Unknown 

Artfield Group Limited 

Address: 1011-1012, 10/F, Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Ascent Goal Investments Limited 74.4%, Lev Leviev 9.5% 

Directorship: Lo Fong Hung (Executive Director), Wang Xiangfei (Executive Director), Kwan Man 
Fai (Executive Director), Wong Man Hin, Lam Ka Wai, Chan Yiu Fai 

Description: The 88 Queensway Group's first publically listed company; engaged in the marketing 
and trading of clocks, office-related products, lighting products, and the trading of metals; Artfield 
entered into a service agreement with China Sonangol to provide marketing analysis, news clipping, 
preparation of sales report, invoicing, and preparation of management accounts services on oil 
trading to China Sonangol 

Ascent Goal Limited 

Address: 1011-1012, 10/F, Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: China Sonangol International Holdings Limited 100% 
Directorship: Unknown 

Description: The 88 Queensway Group used Ascent Goal to purchase Artfield Group Limited in 
2008 

Beijing Tian Qiao Cultural Development Company Limited (formerly known as China 
Angola Engineering Co. Limited) 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: New Bright International Development Limited 100% 
Directorship: Veronica Fung, Lo Fong Hung 
Description: Unknown 

Bright Fair Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Lo Fong Hung 100% 
Directorship: Lo Fong Hung 
Description: Unknown 

China Africa Development Holding Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Gold Ascent Limited 50%, Dayuan International Development Limited 50% 
Directorship: Lo Fong Hung, Catrina C. Marques Pereira 
Description: Unknown 

China Beiya Escom International Limited 



43 



Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 

Ownership: Dayuan International Development Limited 60%, Escom- Espirito Santo Commerce, 
Ltd. 40% 

Directorship: Wu Yang, Wang Xiangfei, Lo Fong Hung, Helder Bataglia, Luis Miguel de Oliveira 
Horta e Costa, Pedro Manuel de Castro Simoes Ferreira Neto 

Description: Joint venture between the 88 Queensway Group and Helder Bataglia's Escom; used to 
invest in Latin America 

China Hong Kong Hydropower Engineering Co. Limited 

Address: Unknown 
Ownership: Unknown 

Directorship: Lo Fong Hung, Veronica Fung 
Description: Unknown 

China Hong Kong Power & Water Engineering Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 

Ownership: Dayuan International Development Limited 60%, Guangxi Guineng Engineering 

Consultants Co., Limited 40% 

Directorship: Wu Yang, Veronica Fung, Lo Fong Hung, Wang Xiangfei, Liu Fengqiu, Zhou Yunhu 
Description: Joint venture between the 88 Queensway Group and Guangxi Guineng Engineering 
Consultants Co. Ltd., presumably for construction projects. 

China International Fund Airport Construction Co. Limited (formerly Jet Technology 
Development Limited) 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: China International Fund Limited 55%, Cheng Jun 25%, Wang Benjun 20% 
Directorship: Lo Fong Hung, Veronica Fung, Wang Benjun, Cheng Jun 
Description: Unknown 

China International Fund Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Dayuan International Development Limited 99%, Lo Fong Hung 1% 
Directorship: Wu Yang, Lo Fong Hung, Veronica Fung 

Description: Responsible for management and financing of construction projects in Angola; 
provided at least $2.9 billion to Angola for infrastructure reconstruction 

China Sonangol International Holding Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Dayuan International Development Limited 70%, Sonangol E.P. 30% 
Directorship: Wu Yang, Lo Fong Hung, Veronica Fung, Manuel Vicente 

Description: Responsible for management and operation of energy sector projects in Angola; China 
Sonangol also has invested in aviation, real estate, and manufacturing elsewhere in Africa, Latin 
America, and the United States 

China Sonangol Asia Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: China Sonangol International Holding Limited 100% 
Directorship: Wu Yang, Lo Fong Hung, Veronica Fung 
Description: China Sonangol International Holding Limited subsidiary 

China Sonangol Engineering & Construction Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 



44 



Ownership: China Sonangol International Holding Limited 100% 

Directorship: Wu Yang, Lo Fong Hung, Veronica Fung 

Description: China Sonangol International Holding Limited subsidiary 

China Sonangol Exploration & Production Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: China Sonangol International Holding Limited 100% 
Directorship: Wu Yang, Lo Fong Hung, Veronica Fung 
Description: China Sonangol International Holding Limited subsidiary 

China Sonangol Finance International Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: China Sonangol International Holding Limited 100% 
Directorship: Wu Yang, Lo Fong Hung, Veronica Fung 
Description: China Sonangol International Holding Limited subsidiary 

China Sonangol Gas International Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: China Sonangol International Holding Limited 100% 
Directorship: Wu Yang, Lo Fong Hung, Veronica Fung 
Description: China Sonangol International Holding Limited subsidiary 

China Sonangol International Investment Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: China Sonangol International Holding Limited 100% 
Directorship: Lo Fong Hung, Veronica Fung 

Description: China Sonangol International Holding Limited subsidiary 

China Sonangol Natural Resources International Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: China Sonangol International Holding Limited 100% 
Directorship: Lo Fong Hung, Veronica Fung 

Description: China Sonangol International Holding Limited subsidiary 

China Urban Development Holding Co., Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 

Ownership: New Bright International Development Limited 70%, Chen Rong 15%, Xia Nankai 15% 
Directorship: Lo Fong Hung, Veronica Fung, Xia Nankai, Chen Rong 
Description: Unknown 

CSG Automobile Limited 

Address: Unknown 
Onwership: Unknown 
Directorship: Lo Fong Hung 
Description: Unknown 

Dayuan International Development Limited (formerly Beiya International Development Limited) 
Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: New Bright International Development 70%, Wu Yang 30% 
Directorship: Wu Yang, Veronica Fung, Lo Fong Hung 



45 



Description: Dayuan was the first known 88 Queensway Group company to begin investing outside 
of China and Hong Kong; primary company with ownership stakes in 88 Queensway Group 
subsidiaries 

Deltop Limited 

Address: Flat F, 2 nd Floor, Block 4, Pokfulam Gardens, 180 Pokfulam road, Hong Kong 
Ownership: Lo Fong Hung 99%, Liu Xiang Mao 1 % 
Directorship: Lo Fong Hung, Wang Xiangfei, Liu Xiang Mao 
Description: Unknown 

Endiama China International Holding Limited 

Address: 6411-6413, 64/F., Two International Finance Centre, 8 Finance Street, Central, Hong Kong 
Ownership: Empresa Nacional De Diamantes De Angola E.P. (Endiama) 55%, New Corporate 
International Limited 45% 

Directorship: Lo Fong Hung, Antonio de Jesus Matias, Zheng Gang, Manuel Arnaldo Sousa Calado 
Description: Joint venture between the 88 Queensway Group and Angola's national diamond 
company 

Global Investments Fund Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Gold Ascent Limited 100% 

Directorship: Lo Fong Hung, Veronica Fung, Manuel Vicente, Francisco de Lemos Jose Maria 
Description: Unknown 

Joyce Link Investment Limited 

Address: Unknown 
Ownership: Unknown 
Directorship: Lo Fong Hung 
Description: Unknown 

New Bright International Development Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Veronica Fung 70%, Lo Fong Hung 30% 
Directorship: Veronica Fung, Lo Fong Hung 

Description: New Bright was the first 88 Queensway Group to be incorporated in Hong Kong and 
was used as a springboard for creating other companies and subsidiaries 

OKP Holdings Limited 

Address: No. 6 Tagore Drive #Bl-06, Tagore Building, Singapore 
Ownership: China Sonangol 9.1% 
Directorship: Or Toh Wat 

Description: OKP Holdings is an infrastructure and civil engineering company, speciali2ing in the 
construction of airport runways and taxiways, expressways, flyovers, vehicular bridges, urban and 
arterial roads, airport infrastructure, and oil & gas-related infrastructure for petrochemical plants and 
oil storage terminals 

Progress Team Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Sunny Global Development Limited 100% 
Directorship: Lo Fong Hung, Kwan Man Fai, Lo Ka Wai 

Description: Owned by Sunny Global Development Limited, a subsidiary of Artfield Group Limited; 
exact purpose unknown 



46 



Right Year Investment Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Unknown 

Directorship: Lo Fong Hung, Kwan Man Fai 
Description: Unknown 

SNPC Asia Holding Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 

Ownership: Dayuan International Development Limited 85%, Escom - Espirito Santo Commerce, 

Ltd. 5%, Societe Nationale des Petroles du Congo (SNPC) 10% 

Directorship: Lo Fong Hung, Veronica Fung, Denis Gokana, Blaise Elenga 

Description: Joint venture between the 88 Queensway Group and the Congolese national oil 

company 

SNPC Asia Development Co., Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: SNPC Asia Holding Limited 100% 

Directorship: Lo Fong Hung, Veronica Fung, Denis Christel Sassou Nguesso, Denis Gokana 
Description: Subsidiary of SNPC Asia Holding Limited 

SNPC Asia Trading Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: SNPC Asia Holding Limited 100% 

Directorship: Lo Fong Hung, Veronica Fung, Denis Christel Sassou Nguesso, Denis Gokana 
Description: Subsidiary of SNPC Asia Holding Limited 

Sonangol Asia Limited 

Address: 1011-1012, 10/F, Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: China Beiya Escom International Limited 70%, Sonangol E.P. 30% 
Directorship: Lo Fong Hung, Wu Yang, Manuel Vicente 

Description: Incorporated in June 2004, this is the first known joint venture between the 88 
Queensway Group and Sonangol. It is unclear how Sonangol Asia Limited differs from China 
Sonangol and its subsidiaries 

Sunny Global Development Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Artfield Group Limited 100% 
Directorship: Unknown 

Description: Artfield Group Limited subsidiary 
Wide Action Investment Limited 

Address: 1011-1012, 10/F., Two Pacific Place, 88 Queensway, Hong Kong 
Ownership: Company Kit Secretarial Services Limited 1 00% 
Directorship: Lo Fong Hung, Kwan Man Fai 
Description: Unknown 

Worldpro Development Limited 

Address: 2201-03, 22/F., World Wide House, 19 Des Voeux Road Central, Hong Kong 
Ownership: World Noble Holdings Limited 100% 

Directorship: Lo Fong Hung, Manuel Vicente, Francisco De Lemos Jose Maria, Moshe Hallak 
Description: Unknown 



47 



Appendix B 



88 Queensway Group Projects by Country* 








Angola 


China 
International 
Fund Limited 


A Nissan manufacturing plant in Luanda that will construct 10,000 
automobiles per year. 


Angola 


China 
International 
Fund Limited 


Construction of 215,500 units of the public housing in Luanda and other 
the 17 provinces covering an area of 31,436,709 m 2 . 


Angola 


China 
International 
Fund Limited 


Water supply and drainage construction and reconstruction projects in the 
cities: Luanda, Senado da Camara, Rio Seco, Surcoa, and Cazenga. 


Angola 


China 
International 
Fund Limited 


The restoration of over 1 ,600 km of highways throughout Angola. 


Angola 


China 
International 
Fund Limited 


The construction and restoration of three major railways in Angola 
totaling over 2,500 km in length. 


Angola 

o 


China 
International 
Fund Limited 


The construction of the New International Airport of Luanda, which will 

be the largest in Africa. The terminal building's area is 160,000 m 2 and 
will have the capacity up to handle over 13 million passengers and 35,000 

tons of cargo per year. 


Angola 


China 
International 
Fund Limited 


The construction of China International Fund Limited's headquarters 
building in Luanda. When completed, the 25-story building will be 99.95 

m tall. 


Angola 


China 
International 


The construction of river irrigation and hydro-electricity projects along 

the Kwanza River. 




Fund Limited 


Angola 


China 
International 
Fund Limited 


The establishment of an industrial zone in Luanda and logistics bases in 
Luanda, Benguela, and Namibe that will stockpile major construction 

11 A 1 " 1"1 111" ' '1 

materials because Angolan prices are high and delivery time is long. 


Angola 


China 
International 
Fund Limited 


The planning of an administrative complex for the Angolan government 
that will include a new presidential palace, Parliament House, Supreme 
Court, office buildings for ministries, and a conference center. 


Angola 


China 
International 
Fund Limited 


The construction of a "new city" southwest of Luanda, called Nova 

Luanda. 


Angola 


China 
International 
Fund Limited 


A joint venture agreement between Endiama EP (the Angolan state- 
owned diamond company) and CIFL, called Endiama China International 
Holdings Limited. The partnership was cancelled in 2007, but Endiama 
China still is listed as an active company on the Hong Kong Company 

Registry. 


Angola 


China 
Sonangol 


A 30 percent stake in the Angolan airline, Sonair. 


Angola 


China 
Sonangol; 
Sonangol 
Sinopec 
International 


A 50 percent stake in offshore oil block 1 8 in Angola through Sonangol 
Sinopec International, a joint venture between China Sonangol and 

Sinopec. 



48 



Country 


Company 


Project 


Angola 


China 
Sonangol 


Oil exploration in offshore oil blocks 3/05 and 3/05 A. 


Angola 


China 
Sonangol; 

China 
International 
Fund Limited 


Sponsorship of an 1 8-year-old Angolan Formula One racecar driver, Luis 
Sa Silva, who races throughout Asia and Europe. 


Argentina 


China 
Sonangol; 
China Beiya 
Escom; China 
Construction 
Bureau 


88 Queensway Group companies' promise to invest $20 billion in energy 
and infrastructure projects; no evidence that any of these investments 

have been made. 


Brazil 


China 
Sonangol 


Purchase of two Legacy 600 executive jets from Empresa Brasileira de 
Aeronaufica SA (Embraer). 


Congo- 
Brazzaville 


SNPC Asia 


Joint venture with Societe Nationale des Petroles du Congo, Congo- 
Brazzaville's state-owned petroleum enterprise. 


Cote 
d'lvoire 


China 
Sonangol 


In discussions with Societe Nationale d'Operafions Petrolieres de la Cote 
d'lvoire (Petroci), Cote d'lvoire's national oil company, and Sinopec over 
the development of several oil concessions and the construction of a 
petroleum refiner)' 


Indonesia 


China 

O L> XXdXX^iUX 


$200 million stake in a CEPU oil and gas field in Indonesia operated by 

\J 1 1 ■*-■(" om 1 n a a n ri H won A/lnnl 1 
XXX CX LdXXXlXXa alXLl XjAaUII 1VXUUXX. 


Mozambique 


China 
Sonangol 


Several cement production projects. 


Nigeria 


Sonangol 


r Tl tYQ -n ppn wtq fpf oil pyr» nra t i on t^rniprts Qrrnrnina fn ("nin-a Son-ancrol 

website, but no report of this in the media. 


North Korea 


China 
Sonangol 


Statements in job advertisements for China Sonangol that the companv is 
active in North Korea. The exact details of projects are unknown. 


Russia 


China 
Sonangol 


Statements in job advertisements for China Sonangol that the company is 
active in Russia. The exact details of projects are unknown. 


Singapore 


China 
Sonangol 


Purchase of 9.1 percent of the shares of OKP Holdings Limited, a 
Singaporean construction and civil engineering firm 


Tanzania 


China 
Sonangol 


In the process of constructing an airport terminal at Julius Nyerere 
International Airport in Dar es Salaam. The project is being financed by 
China Development Bank. 


Tanzania 


China 
Sonangol 


Granted oil exploration licenses in Tanzania in return for its purchase of 
49 percent of Air Tanzania's shares. 


United 
States 


China 
Sonangol 


Purchase of the JP Morgan Chase building in Manhattan, 49 percent of 
the former New York Times building, and 49 percent of the Clock Tower 
from Lev Leviev's Africa-Israel Investments, totaling $710 million. 


Venezuela 


China Beiya 
Escom 


Lo Fong Hung and Helder Bataglia's appearance on President Hugo 
Chavez's television program in April 2004. The following day, they signed 
letters of intent for investment in Venezuela. 



49 



*The 88 Queensway Group projects listed above are the projects that have been published in media reports. 
However, because of the opacity of the 88 Queensway Group, additional projects that have not been made 
public may be underway. 



Sources: China International Fund Limited Web site. <http:/ /www.chinainternationalfund.com>; "Highlights: 
Angolan Independent Press Weekly Digestjuly 16-29, 2006" AFP20060805501002^4«^/a - OSC Report in 
Portuguese, July 16 — 29, 2006; "Endiama, Miracel and Endiama-China project approved," Diamond Intelligence 
Briefs, Vol. 20, No. 447 (September 27, 2005): 3666(1); Indira Campos and Alex Vines, "Angola and China: A 
Pragmatic Partnership," (working paper presented at a CSIS conference, "Prospects for Improving U.S.- 
China-Africa Cooperation," December 5, 2007); Agence France Presse /'China to invest 20 billion in 
Argentina," November 14, 2004; Latin America News Digest, "Brazil Embraer Gets Two Legacy 600 Jets Order 
from China Sonangol," August 3, 2007; Asia Legal Business /'China Sonangol International - Indonesian CEPU 
project interest acquisitionUS$200.00 m," March 26, 2009. <http:/ / asia.legalbusinessonline.com/ deals/ china- 
sonangol-international-indonesian-cepu-project-interest-acquisition/1662>; Financial Times Limited , "China 
National Chemical Marching into African Market," October 23, 2007. 

<http:/ /www.micromedex.com/pressroom/news_feeds/?story_ID=142271&category=3>; China Sonangol 
Web site. <http:/ /www.chinasonangol.com>; China Sonangol job postings. 

<http:/ /www.jobhuanbao.com/Company/listCompany.asp?comid=68046>; The East African, "Chinese Firm 
Likely to Buy 49 Percent Shares of Air Tanzania," August 16, 2008.; Linda Barr O'Flanagan, "Africa Israel sells 
stake in its Manhattan real estate holdings," Real Estate Weekly, November 20, 2008.; Venezuelan Presidential 
Press, "President Chavez: The FTAA Has Died for the Good of Our People," April 3, 2004.; OKP Holdings 
Limited, "OKP Teams Up With Strategic Business Partner Who Takes On Substantial Stake," April 17, 2009; 
Pascal Airault, "La Cote d'lvoire se rapproche de la Chine," Jeune Afrique, June 12, 2009; Macau N«w,"China 
Sonangol and CIF sponsored Angolan driver Luis Sa Silva to race in Europe and Asia," April 23, 2009. 



50 



Appendix C: The 88 Queensway Group Personnel and Connections 



Veronica Fung Yuen Kwan - Ms. Veronica Fung is one of the first two individuals known to be 
involved with the 88 Queensway Group. She is the owner and director of New Bright International 
Development Limited, the first company known to be associated with the Group. Fung owns 70 
percent of New Bright. She is also the director of at least twenty companies incorporated in Hong 
Kong, most of which are located at the 88 Queensway address. She is one of the only high-ranking 
associates with a public profile prior to 2003. In 1992, Fung was listed as director of Acegain 
Investments Limited and owned 50 percent of the shares of the company. Acegain has since been 
dissolved. Since Fung owns the majority shares of New Bright, she appears legally to control the 
majority shares of each of New Bright's several dozen subsidiary companies. However, she has been 
notably absent from any media coverage related to companies associated with the 88 Queensway 
Group. 

Lo Fong Hung - Ms. Lo Fong Hung was appointed as director of New Bright in 2003 and owns 30 
percent of the company. Lo has served as the public face of the 88 Queensway Group, making 
several public appearance on behalf of companies associated with the consortium. Although there is 
little information publically available about Lo's personal or professional background prior to 2003, 
she is listed currently as the director of at least thirty-four companies incorporated in Hong Kong, 
most of which are listed at the 88 Queensway address. Lo is married to Mr. Wang Xiangfei. Lo is 
also director of a Sonangol Sinopec International (SSI), a joint venture between Sinopec and Angola's 
national oil company, Sonangol. 

Wu Yang — Mr. Wu Yang is the director of at least fourteen companies headquartered in Hong 
Kong (most of which are located at the 88 Queensway address) and, like Lo and Fung, he has little 
known public background in international business. Wu's association with the 88 Queensway Group 
is significant, because research indicates that he may be tied to the PRC Ministry of State Security, the 
PRC Mnistry of Public Security, and/or Sinopec. On company filings, Wu lists his residential 
address as "No. 14 Dong Chang An Street, Beijing, China." Incidentally, this address is the 
headquarters for the Ministry of Public Safety (MPS), the internal police authority for the PRC. Also 
located in this compound is a reception office for the Ministry of State Security (MSS), the primary 
state agency responsible for foreign intelligence activities. In addition to his potential connection to 
the PRC intelligence or security apparatus, Wu Yang also has been named in Angolan government 
reports as a vice chairman of Sinopec, although he is not listed on any of Sinopec's annual reports 
from 2001 to 2005. Wu also is listed as an independent executive director for Beijing Yanhua Up- 
Dated High-Tech Co., Ltd., a Sinopec subsidiary, in Yanhua's annual reports. 

Wang Xiangfei - Mr. Wang Xiangfei is a former director of China Everbright and a current director 
of China International Trust and Investment Company (CITIC). Wang became involved with the 88 
Queensway Group no later than 2006, when he was listed as director of China Beiya Escom — a joint 
venture between the 88 Queensway Group and the Portuguese bank, Escom. He also is listed as 
chief financial officer of Sonangol Sinopec International (SSI), a joint venture between Sinopec and 
Angola's national oil company, Sonangol. While he plays a leadership role in at least six 88 
Queensway Group companies, it is unclear exactly how much control or leadership he wields within 
the Group. Wang Xiangfei graduated from Renmin University of China in 1982, the first graduating 
class coming out of the university after the Cultural Revolution. Wang is married to Lo Fong Hung. 

Kwan Man Fai - Since 2003, Mr. Kwan Man Fai has held leadership positions in at least five of the 
88 Queensway Group's companies. Kwan worked as a partner at Li & Partners, a Hong Kong-based 
law firm, until 2008. While Kwan was working with the firm, Li & Partners was listed on Hong 
Kong Company Registry documents as being secretary for most of the 88 Queensway Group 
companies. When he left Li & Partners in early 2008, Kwan's law firm was no longer identified on 



51 



company filings as secretary for the 88 Queensway Group companies. Kwan Man Fai signed the 
deed acquiring the Manhattan real estate sold by Africa Israel Holdings (USA) Corporation in 
October 2008. The deed lists Kwan Man Fai as the vice president of CS Wall Street LLC, the 88 
Queensway Group subsidiary created for the purpose of purchasing real estate in the United States. 

Xu Jinghua - Mr. Xu Jinghua is one of the most opaque individuals involved in the 88 Queensway 
Group. In multiple media reports, Xu is said to be the chairman of the board of Dayuan and China 
International Fund Limited (CIFL), both 88 Queensway Group subsidiaries. However, he is not 
listed on official registry documents as being a director or shareholder of any of the 88 Queensway 
Group companies. According to business media and Chinese bloggers in mainland China, Xu 
controls both oil trading and infrastructure construction operations in Angola. Bloggers and former 
CIFL personnel also note that Xu has gone by several aliases since working with CIFL; among these 
are Xu Songhua, Sa Muxu, Samo, and "Sam King." Sam King is also the English alias of the 
individual who owned 50 percent of Acegain Investments Limited along with Veronica Fung in 1993. 
However, it remains unclear whether or not Xu Jinghua is the same Sam Kng as the individual from 
Acegain. According to a Chinese-language media source, Xu Jinghua may also refer to himself as 
"Sam Pa" or "Sampa," which is the same name as one of the individuals who participated in a 2004 
delegation to Buenos Aires along with Lo Fong Hung. "Sampa" was described by Argentine media 
at the time as a "Cambodian who was affiliated with China Beiya Escom." Asia Times reported in 
March 2007 that Xu has "co2y relationships" with Angola's political and military leadership. These 
relationships may be the result of ties developed during Angola's civil war. Several Chinese bloggers 
have noted that Xu is rumored to have been involved in arms sales to the Angolan military during 
the Angolan civil war. These claims have yet to be substantiated. 

Ju Lizhao — Mr. Ju Lizhao has been documented as controlling China International Fund Limited 
(CIFL) projects in Angola. Ju is reportedly the CIFL director stationed in Angola, although he is not 
listed on any official documents. Ju potentially represents an important personnel connection 
between the 88 Queensway Group and China's People's Liberation Army (PLA). He is a former 
senior colonel for the PLA General Staff Department's Foreign Affairs Division, the military office 
responsible for military exchanges in China. Four years after retiring from the PLA, Ju was reported 
to have begun associating himself with CIFL. 

Helder Bataglia — Mr. Helder Bataglia is a Portuguese national who grew up in Angola. Bataglia is 
the president and chairman of Espirito Santo Commerce (Escom), a subsidiary of the Portuguese 
bank Espirito Santo Financial Group. Escom has major interests in the airline, agriculture, banking, 
construction, and diamond sectors in Africa and Latin America, particularly in Angola and the 
Republic of the Congo. Bataglia is reputed to be a close friend of Congolese President Denis Sassou 
Nguesso, Venezuelan President Hugo Chavez, former Argentine President Nestor Kirchner, and 
Angolan President Jose Eduardo dos Santos. He also has business deals with high-level officials in 
the Russian diamond sector. Bataglia's business and political connections have helped the 88 
Queensway Group gain access to leaders in Venezuela, and he has claimed publically to have 
convinced the Group to come to Angola as well. In April 2004, Bataglia established a joint venture 
with the Group called China Beiya Escom International Limited. China Beiya Escom mainly has 
been used as a means of investing in Latin America. Bataglia, Lo Fong Hung, and "Sam Pa" 
travelled to Argentina in November 2004 to sign agreements on behalf of the Chinese, Portuguese, 
and Argentine governments. 

Pierre Falcone - Mr. Pierre Falcone is an individual who likely has helped the 88 Queensway Group 
invest in Angola. Falcone, born in French Algeria, was involved heavily in an international oil-for- 
arms scandal called Angolagate. In 1993, the son of former French President Francois Mitterand, a 
Russian diamond magnate, and Falcone all were involved in a deal to sell $791 million of Russian 
arms to the Angolan government during its civil war. In the years since Angolagate, Falcone's 



52 



relationship with President Jose Eduardo dos Santos has remained strong. Their relationships is so 
pronounced that when Falcone was arrested for his activity in Angolagate in 2003 by French 
authorities, dos Santos appointed him as the Angolan ambassador to the United Nations cultural 
organization, UNESCO, in order to procure diplomatic immunity for Falcone. Currently, Falcone 
resides in Beijing and owns a consulting company called Pierson Asia, which specializes in advising 
Chinese companies that want to establish operations in Angola. One of Pierson Asia's clients is 
China Sonangol, an 88 Queensway Group company heavily involved in Angola's oil sector. Other 
Chinese clients of Pierson Asia include CITIC and Zhen Hua Oil, the oil trading arm of Chinese 
state-owned armaments and engineering firm China North Industries Corporation (NORINCO). 

Lev Leviev — Mr. Lev Leviev is a billionaire Israeli diamond magnate who has made a large amount 
of his fortune trading diamonds in Africa by building on his high-level Angolan political contacts, 
namely Angolan President dos Santos's daughter, Isabel dos Santos. He is the director of Africa 
Israel Investments Limited, which has interests with its subsidiaries in diamonds, real estate, and 
chemicals. Africa Israel Investments Limited also has investments throughout Africa, Israel, Russia, 
and the United States. In August 2008, Leviev and his company bought almost 10 percent of the 
shares of Artfield Group Limited, the 88 Queensway Group's publically traded company. In addition, 
Africa Israel Holdings (USA) Corporation, a subsidiary of Africa Israel Investments, is the company 
that sold nearly $1 billion of Manhattan real estate to China Sonangol in October 2008. 

Manuel Vicente — Mr. Manuel Vicente is the chairman and CEO of Sonangol E.P., Angola's 
national oil company. He became connected with the 88 Queensway Group when Sonangol formed 
a joint venture with an 88 Queensway Group subsidiary (Dayuan) to create China Sonangol. He is 
director of at least four 88 Queensway Group companies and travelled to Argentina in November 
2004 as part of the same delegation as Lo, Bataglia, and Sam Pa. Vicente has been a member of the 
supervisory board and nonexecutive senior board member of Banco Comercial Portgues S.A. since 
January 2008 and a director of Galp Engergia SGPS SA, a Portguese oil company. Both of these 
companies have made numerous investments in Angola. He is also a member of the board of 
directors of the Carlyle Group. 

Helder Viera Dias, also known as "Kopelipa" — Kopelipa is a retired Angolan general and 
currently is a senior intelligence advisor to Angolan President dos Santos. Kopelipa controls the 
Gabinete de Reonstrucao Nacional (GRN,) which administers the loans given to Angola by China 
International Fund Limited. According to the Angolan media, the GRN is extremely opaque and 
"muddles state finances," with the Angolan Ministry of Finance knowing few details about GRN 
activities or expenditures. 



Sources: Agence France Presse /'China to Invest 20 Billion Dollars in Argentina," November 17, 2004.; Latin 
America News Digest, "Brazil Embraer Gets Two Legacy 600 Jets Order from China Sonangol," August 3, 2007.; 
Lucy Corkin, "China's Interest and Activity in Angola's Construction and Infrastructure Sectors," Centre for 
Chinese Studies, 2006.; Manuel Ennes Ferreira, "China in Angola: Just a Passion for Oil?" China Returns to Africa: 
A Rising Power and a Continent Emprace, (New York, NY: Columbia University Press, July 2008), p. 313; 
"Zhongguo Guoji Jijin Gongsi Xu Jinghua Lo Fong Hung Xianggang Beiya Gongsi he Angela Chengli 
'Azhong Shiyou Kongshi Guyou Xian Gongsi" ("China International Fund Limited Xu Jinghua, Lo Fong 
Hung, Hong Kong Beiya International, and Angola create 'China Sonangol International Holdings Limited 
Company"), Sunrise Financing Message Board, March 27, 2007. 

http:/ / www.sunrisefinancing.com/bbs /viewthread.php?tid=l 471 .; Artfield Group Limited Annual Report 
2008. Stock Code: 1229, 

http://www.hkexnews.hk/listedco/listconews/sehk/20080730/LTN20080730684 C.pdf .; Tan Po, "Spy 
Headquarters Behind the Shrubs — Supplement to 'Secrets about CPC Spies,'" Hong Kong, March 1, 1997, No. 
23333, pp.34-37 Cheng Mng on Spy Headquarters FBIS-CHI-97-047.; Zhongguo shi you hua gong ji tuan 



53 



gong si nian jian. (China Petrochemical Corporation Annual Report) 2001-2005.; Beijing Yanhua Gao Xinji 
Xu Gu Fen You Xian Gong Si di wu jie dong shi hui, di si ci hui yi jue yi gong gao," ("Beijing Yanhua High- 
Tech Up-Dated Co, Ltd. Fifth Director Meeting, Fourth Resolution,"), Zhongguo Zheng Quan Wang - Shanghai 
Zheng Quan Bao (China Securities Net — Shanghai Securities News), March 17, 2006. 

http://finance.sina.com.en/stock/t/20060317/0252600521.shtml .; Beijing Yanhua Up-Dated High-Tech Co., 
Ltd., Annual Report 2005. http://disclosure.s2se.en/m/finalpage/2006-03-17/16576411.PDF .; China CITIC 
Bank Corp Ltd (Shanghai Stock Exchange: Wang Xiangfei brief biography), Reuters Business and Finance, 
February 24, 2009. 

http://www.reuters.com/finance/stocks/officerProfile?symbol=601998.SS&officerId=947622 .; Artfield 
Group Ltd (Hong Kong Stock Exchange: Kwan Man Fai brief biography), Reuters Business and 
Finance,February 25, 2009. 

http://www.reuters.com/finance/stocks/officerProfile?symbol=1229.BE&officerId=l 134991 .; NYC 
Department of Finance, Office of the City Register, Document ID: 2008111800527001, Document Date: 
November 14, 2008, Preparation Date: November 18, 2008.; William Tonet, "It is necessary to change the way 
the country is governed," Folha 8, June 24, 2006-July 1, 2006.; "Big Oil, High Stakes," Africa Asia Confidential, 
Volume 1, Number 1 (November 2007).; "Ningde Lu Qiao: Zhongji Xu Jinghua Shen Tong Angela" ("Ningde 
Road and Bridge: CIFL's Xu Jinghua Mysterious Angola"), China Securities Journal, March 28, 2007. 
http://www.cs.com.cn/xw2x/02/200703/t20070328 1074202.htm .; Zhou Jiangong, "Africa fren2y feeds 
China stock bubble," Asia Times Online, March 27, 2007. 

http:/ /www.atimes.com/ atimes /China Business /IC27Cb01 .html .; Lu Buping, "Zhongguo Dalu: Zhongguo 
Guoji Jijin Gongsi 2ai Angela bu 2hi xiang gan shenme" ("Mainland China: Do Not Know what China 
International Fund Limited would like to do in Angola"), Africa Windows Message Board, January 18, 2007. 
http:/ /www.africawindows.net/html/ fei2hou2ixun/ fei2houxinwen/20070704/1681.shtml .; 1 "Zhongji Gongsi 
Zhu Angela Zong2hihui Ju Li2hao: 'Women bu shi da pianzi,'" ("CIFL Chairman Stationed in Angola, Ju 
Li2hao: We're not liars'"), Di Yi Caijing Ri Bao (Number One Finance Daily), April 2, 2007. 
http: / / www.p5w.net/ stock/ news/gsxw/ 200704/ t864743.htm .; "Zui xin 2onghe fenxi 600477, yong you jiu 
shi facai bu kan hou yi" ("Latest combined analysis of 600477, Possession is riches, have no regrets"), Hexun 
Web Blog, July 10, 2007, http://guba.hexun.com/600477.guba.512985.html .; "Hai jun Bei Hai jian dui" ("North 
Sea Naval Fleet"), The Standing Committee of Qingdao Municipal People's Congress website.; "Interview with Helder 
Bataglia," Press Net - Angola, September 6, 2004. http: / / www.pres snet-dc .com / angola / intes com.asp .; "Joint 
Angolan, Russian, Portuguese Diamond Exploration To Create 1,500 Jobs," Eusophone Africa - FBIS Report in 
Portuguese, November 25, 2005. OSC ID: AFP20051124503002.; Angela Charlton and Pierre-Antoine 
Souchard, "High-Profile Suspects in Angola Arms Trial in Paris," Washington Post, October 7, 2008.; The 
Economist, "Angola-gate," November 19, 2008.; "A Controversial Figure Pops Up in Beijing," Africa Energy 
Intelligence, June 18, 2008. www.africaintelligence.com .; OSC Report Highlights Angolan President's Oldest 
Daughter's Influence," OSC Feature - Angola - OSC Report, October 17, 2006. OSC ID: FEA20061 01 8028807.; 
Ray Fisman, "Diamonds are a Guerilla's Best Friend," Slate Magazine, August 17, 2007.; Linda Barr O'Flanagan 
"Africa Israel sells stake in its Manhattan real estate holdings," Real Estate Weekly, November 20, 2008.; Mariano 
Obarrio, "De aquel 'megaanuncio' quedo muy poco," Ea Nacion, June 1, 2005. 

http:/ /www.lanacion.com.ar/nota.asppnota id=709097 .; Galp Energia SGPS SA: Lisbon Stock Exchange. 
Manuel Vicente biography. BusinessWeek Companies. 

http:/ /investing.businessweek.com/businessweek/ research/ stocks /people /person.asp?personld=33989109&c 
apId=874537&previousTitle=Galp%20Energia%20SGPS%20SA . 



54 



1993 — Veronica Fung and "Sam King" are listed as directors of Acegain Investments Limited 



April 2001 — Acegain Investment Limited is dissolved 



2002 



2003 



Jan. 2002 — Jiang Zemin announces China's "going out" 



April 2002— Angolan civil war ends 



July 2002 — China Ex-Im Bank and China Construction Bank finance $1 50 
million for construction projects in Angola 



July 2003 — New Bright International Development Limited is incorporated in Hong Kong 



Aug. 2003 — Beiya International Development Limited incorporated in Hong Kong (later 
changed name to Dayuan International Development Limited) 



Nov. 2003 — China International Fund Limited incorporated in Hong Kong 



2004 



March 2 1, 2004- — China Ex- Im B ank' s $2 billion oil-b acke d lo an to Angola is approve d 



April 4> 2004 — Lo Fong Hung and Helder B ataglia meet with Venezuelan President 
Hugo Chavez and sign $200 million agreements 



April 21, 200+ — China Beiya Escom International Limited incorporated in Hong Kong 



June 2004 — Sonangol Asia Limited is incorporated in Hong Kong 



21X15 



Sep. 2004 — Sonangol Sinopec International Limited is incorporated; Sinopec acquires block 18 in Angola 



Nov. 16, 2004— President Hu lintao meets with Argentine President Nestor 



Nov. 16, 2004 — Lo Fong Hung, Samp a, and Helder B ataglia sign business agreements with 
Argentine President Kirchner 



Late Nov. 2004 — PRC Foreign Minister Li Zhao Xing denounces China Beiya Escom 
after signing deals in Argentina 



December 200 4 — First tranche of $2 billion China Ex-Im Bank loan released to Angola 



Late 2004 — China International Fund Limited extends at le ast $2.9 billion oil-b acked loan to Angoli 



55 



March 2005 — China Ex-Im Bank provides an additional $2 billion oil-backed loan to Angola 

March 21, 2005— Joint venture established between Dayuan and Congolese national 
oil company, called SNPC Asia 

April 2005 — Wu Yang is appointed independent executive director of Beijing 
Yanhua Up-Dated High-Tech Co., Ltd., a Sinopec subsidiary. 

April 6, 2005 — CIFL and Endiama joint venture for diamond exploration in Angola is approved by Angolan 
Council of Ministers 



March 17, 2006 — Wu Yang resigns from Beijing Yanhua 

March 2006 — SSI named as partner in the construction of Lobito refinery in Angola 



Dec. 2006 — SNPC Asia implicated in lawsuit against SNPC and Congolese government 



Feb. 2007 — China Sonangol orders 3 Airbus Corporate Jets and 2 
Executive Jets from Brazilian airline, Embraer 



Earty March 2007 — SSI deal to construct Sonaref refinery in Lobito is canceled 


March 7, 2007— Joint venture between Endiama and CIFL is canceled 






March 29, 2007 — Chinese embassy in Angola denounces CIFL and its projects 





April 200 7 — Hangxiao Steel Structure is investigated for insider trading after signs 
deal with CIFL by China Securities Regulatory Commission in Shanghai 



July 2007 — Angolan media reports many of CIFL projects have stalled due to lack of funds 



Nov. 2007 — SSI relinquishes stake in three oil concessions in Angola 

Jan. 2008 — 88 Queensway Group acquires controlling shares of Artfield Group Limited 



April 2008 — Kwan Man Fai resigns from Li & Partners 

July 2008 — China Sonangol begins negotiations with Tanzanian officials to buy Air Tanzania shares 



Aug. 9, 2008 — Chinese embassy in Tanzania denounces China Sonangol 



Aug. 23, 2008 — Lev Leviev purchases 10 percent of Artfield shares 



Aug. 31, 2008 — China Sonangol purchases nearly $1 billion in Manhattan real estate from Africa Israel USA 



Dec. 2008 — Angolan Pres. dos Santos and Sonangol CEO Manuel Vicente travel to China 



Feb. 1, 2009 — Tanzanian oil company grants China Sonangol 3 licenses for oil 
exploration after it purchases 49 percent of Air Tanzania 

Feb. 16, 2009— Hu lintao visits Tanzania 

March 12, 2009 — China Development Bank offers Angola $1 billion non-oil backed loan for 
March 26, 2009 — China Sonangol acquires $200 million stake in CEPU oil and gas field in Indonesia 



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